CREATION OF MULTI-CLASS UNIT INVESTMENT TRUST FUND (UITF)

The Monetary Board in its Resolution No. 1526 dated 25
September 2014 approved the following amendments to Sections X410 and
4410Q of the Manual of Regulations for Banks (MORB) and Manual of
Regulations for Non-Bank Financial Institutions (MORNBFI),
respectively, to allow for the offering of a multi-class UITF.

Section 1. Subsection X410.1 and 4410Q.1 are hereby amended to read as follows:

“Subsection X410.1/4410Q.1 Definitions

“a. Unit Investment Trust Funds. x x x

x x x

i. MULTI-CLASS FUND. A UIT FUND STRUCTURE WHICH HAS MORE
THAN ONE CLASS OF UNITS IN THE FUND AND IS INVESTED IN THE SAME
POOL OF SECURITIES AND THE SAME PORTFOLIO, INVESTMENT OBJECTIVES
AND POLICIES”.

Previous item i is renumbered as item j of this subsection.

Section 2. Subsection X410.2/4410Q.2 are hereby amended to read as follows:

“Subsection X410.2/4410Q.2 Establishment of a Unit Investment Trust Fund. Any
trust entity authorized to perform trust functions may
establish, administer and maintain one (1) or more UIT Funds subject to
applicable provisions under this Section. A UlT Fund may be
allowed to operate as a 1) feeder fund, 2) fund-of-funds AND/OR
3) MULTI-CLASS FUND; Provided, That the plan rules and related documents
shall state that the UIT Fund is a feeder fund, fund-of-funds,
AND/OR MULTI-CLASS FUND, and provide an explanation or illustration of
such structures.

Section 3. Subsection X410.5/4410Q.5 are hereby amended to read as follows:

“Subsection X410.5/4410Q.5 Operating and accounting methodology. xxx

“a. The total assets and accountabilities of each fund shall be
accounted for as a single account referred to as pooled-fund accounting
method. THE INVESTMENTS OF A MULTI-CLASS FUND SHALL REMAIN AS ONE
POOL AND ARE NOT SEPARATELY ALLOCATED TO CLASSES.

b. Contributions to each fund by clients shall always
be through participation in units of the fund and each unit shall have
uniform rights AND privileges, as any other unit; IN THE CASE
OF MULTI-CLASS FUND, UNITS SHALL BE ISSUED AS UNITS IN A CLASS OF A
FUND.

xxx

d. The beneficial interest of each participation unit
shall be determined under a unitized net asset value per unit (NAVPu)
valuation methodology defined in the written plan of the UIT Fund, and
no participation shall be admitted to, or redeemed from, the fund OR
CLASS OF A FUND, except on the basis of such valuation. To arrive at a
fund’s NAVPu, the fund’s total Net Assets is divided by the total
outstanding units. Total Net Assets is a summation of the market value
of each investment less fees, taxes, and other qualified expenses, as
defined under the plan rules.

WHEN THERE IS A DIFFERENT FEE STRUCTURE FOR EACH
CLASS, THE NAVPU OF EACH CLASS SHALL BE COMPUTED BY DIVIDING TOTAL NET
ASSETS OF A CLASS BY THE TOTAL OUTSTANDING UNITS OF SUCH CLASS; WHERE,
THE NET ASSETS OF EACH CLASS SHALL REPRESENT ITS PROPORTIONATE SHARE ON
THE NET ASSETS OF THE MULTI-CLASS FUND LESS THE TRUSTEE FEE AND
EXPENSES ATTRIBUTABLE TO THAT CLASS. THE NET ASSETS OF THE
MULTI-CLASS FUND IS THE SUMMATION OF THE MARKET VALUE OF EACH
INVESTMENT LESS FEES, TAXES, AND OTHER QUALIFIED EXPENSES,
BUT GROSS OF TRUSTEE FEES AND EXPENSES ATTRIBUTABLE TO A
PARTICULAR CLASS, AS DEFINED UNDER THE PLAN RULES.

Section 4. Subsection X410.6/4410Q.6 are hereby amended to read as follows:

“Subsection X410.6/4410Q.6 Plan Rules. xxx

“a. Title of the Plan. x x x

b. Manner by which the fund is to be operated. A
statement of the fund’s investment objectives, policies AND
limitations, AND IF APPLICABLE, THE DISTINCTIVE FEATURES OF THE
DIFFERENT CLASSES OF UNITS SUCH AS THE LEVEL OF TRUSTEE FEES AND
EXPENSES FOR EACH CLASS AND OTHER PECULIARITIES WHICH THE BSP
MAY ALLOW.

x x x

e. The unitized NAVPu valuation methodology as prescribed
under Subsec. X410.5.d shall be employed. THE PLAN RULES
SHALL ALSO PROVIDE THE METHOD OF DETERMINING THE PROPORTIONATE SHARE
OF THE CLASSES OF UNITS TO THE VALUE OF THE ASSETS OF THE
FUND.

f. Terms and conditions governing the admission or redemption
of units of participation in the fund. x x x Provided, That
the admission and redemption prices shall be based on the end of day
NAVPu of the fund OR OF the CLASS OF A FUND, IF APPLICABLE, computed
after the cut-off time x x x

x x x

j. Amount of fees/commission and other charges to be deducted from the fund. x x x

SALES, DISTRIBUTION, marketing, AND/OR other promotional related
expenses shall be for the account of the trustee and shall be presumed
covered by the trust fee. IN THE CASE OF A MULTI-CLASS FUND THAT HAVE
DIFFERENT LEVEL OF TRUSTEE FEES AND EXPENSES, THERE SHALL BE A POLICY
ON THE EQUITABLE ALLOCATION OF ANY COSTS, CHARGES, AND EXPENSES
PAYABLE OUT OF THE MULTI-CLASS FUND, WHICH ARE NOT ATTRIBUTABLE TO
ANY PARTICULAR CLASS.

k. Such other matters as may be necessary or proper to define clearly the rights of participants in the Fund. x x x

Section 5. Effectivity. This Circular shall take
effect fifteen (15) days following its publication in the Official
Gazette or in any newspaper of general circulation in the Philippines.

FOR THE MONETARY BOARD:

(SGD) AMANDO M. TETANGCO, JR.

Governor