Re: Request for Comments on the Proposed Guidelines on the Implementation of the ASEAN Capital Markets Forum Pass (ACMF Pass) under the ASEAN Capital Market Professional Mobility Framework

2018 SEC MSRD RE: REQUEST FOR COMMENTS ON THE PROPOSED GUIDELINES ON THE IMPLEMENTATION OF THE ASEAN CAPITAL MARKETS FORUM PASS (ACMF PASS) UNDER THE ASEAN CAPITAL MARKET PROFESSIONAL MOBILITY FRAMEWORK NOTICE The Securities and Exchange Commission (the Commission) intends to issue Guidelines on the Implementation of ASEAN Capital Markets Forum Pass (ACMF PASS) under the ASEAN Capital Market Professional Mobility Framework . Hence, the Commission is inviting interested parties to submit their views, comments, and inputs to the proposed guidelines. The draft SEC Memorandum Circular is attached herewith for your reference. Kindly address your comments to the Markets and Securities Regulation Department (MSRD) , Ground Floor Secretariat Building, PICC Complex, Roxas Boulevard, Pasay City, c/o Ms. Melita Pasagui ( [emailprotected] ) and Ms. Lea Avellanosa ( [emailprotected] ) not later than 12nn, 07 December 2018 . ATTACHMENT SEC MEMORANDUM CIRCULAR NO. ____ Series of 2018 SUBJECT : GUIDELINES ON THE IMPLEMENTATION OF ACMF PASS UNDER THE ASEAN CAPITAL MARKET PROFESSIONAL MOBILITY FRAMEWORK WHEREAS, Section 2 of the Securities Regulation Code (SRC) declares that it is the policy of the State to promote the development of the capital market and protect the investors; WHEREAS, Section 5 of the SRC provides the Commission the power to formulate policies and recommendations on issues concerning securities market; WHEREAS, Section 72 of the SRC authorizes the Commission to issue and amend rules and regulations and relative thereto, the Commission may classify persons, securities, and other matters within its jurisdiction, prescribe different requirements for different classes of persons, securities, or matters, and by rule or order, conditionally or unconditionally exempt any person, security, or transaction, or class or classes of persons, securities or transactions, from any or all provisions of the SRC. CAIHTE WHEREAS, Section 35 of the Investment Company Act or RA 2629, pursuant to the Commission's authority to make, issue, amend, and rescind rules and regulations and such orders as are necessary or appropriate to the exercise of its powers under this law, the Commission may classify persons, securities and other matters within its jurisdiction and prescribe different requirements for different classes of persons, securities, or matters. WHEREAS, the Philippine Securities and Exchange Commission is a signatory to the Memorandum of Understanding on the ACMF PASS (MOU) under the ASEAN Capital Market Professional Mobility Framework together with the securities regulators of Thailand, Malaysia and Singapore. WHEREAS, the ASEAN Capital Market Professional Mobility Framework aims to enhance the connectivity of capital market professionals in the ASEAN region. WHEREAS, ACMF Pass allows the freer movement of professionals licensed from a home country to perform investment advice activities and issue research report on ASEAN financial products in a host country under the Framework. WHEREAS, there is a need to issue Guidelines with regard to the implementation of the ACMF Pass under the ASEAN Capital Market Professional Mobility Framework. NOW, THEREFORE, the Commission hereby issues the following guidelines on the implementation of the ACMF Pass under the ASEAN Capital Market Professional Mobility Framework. ARTICLE ONE General Provisions SECTION 1. Applicability. This shall be known as the "Guidelines on the Implementation of ACMF Pass under the ASEAN Capital Market Professional Mobility Framework." These guidelines shall apply to: a. Professionals in the Philippines who intend to obtain an ACMF Pass in other Signatory to the MOU b. Professionals in other Signatory countries who intend to obtain an ACMF Pass in the Philippines SECTION 2. Definition of Terms . For purposes of these Guidelines, the following definitions of terms shall apply, unless the context otherwise requires: a. ACMF member means the securities regulator of the respective ASEAN jurisdiction, collectively referred to as the "ACMF members"; b. ACMF Pass means the authorisation by a Host Regulator to allow a Professional from the Home Jurisdiction to perform activities under the Framework in Host Jurisdiction; c. Commission refers to the Philippine Securities and Exchange Commission; d. Home Jurisdiction means the jurisdiction of the Signatory in which a Professional is licensed or registered or approved or authorised; e. Host Jurisdiction means the jurisdiction (other than the Home Jurisdiction) of a Signatory in which a Recognised Representative performs the activities specified in the Framework in Host Jurisdiction; f. Home Regulator means the Signatory whose jurisdiction is the Home Jurisdiction of the Professional; DETACa g. Host Regulator means the Signatory whose jurisdiction is the Host Jurisdiction of the Recognised Representative; h. Laws and Regulations means any law, regulation or regulatory requirement applicable in the jurisdiction of a Signatory, and where the context permits include any rule, direction, requirement, or policy made or given by or to be taken into account by the Signatory in its jurisdiction; i. Licensed Firm means any legal person authorised to undertake the business related to dealing in and giving advice on the capital market products under the Laws and Regulations of the Signatories; j. Professional means a person who is licensed or registered or approved or authorised by a Signatory to perform, including but not limited to, the activities specified in the Framework in its jurisdiction; k. Recognised Representative means a Professional who has obtained an ACMF Pass; l. Signatory means the ACMF member who signed the MOU on the ACMF Pass under the ASEAN Capital Market Professional Mobility Framework, and collectively, will be referred to as "the Signatories." ARTICLE TWO The ACMF Pass SECTION 3. Qualified Professionals in the Philippines . The following registered capital market professionals in the Philippines are qualified to apply for the ACMF Pass from a Host Regulator and become a Recognised Representative in other Signatory Countries: a. Salesman of a Broker Dealer a natural person hired to buy and sell securities on a salary or commission basis properly endorsed to the Commission by the employing Broker Dealer as defined in Rule 28.1.1 of the 2015 SRC Rules; b. Certified Investment Solicitor a natural person of legal age duly licensed by the Commission and appointed by the Fund or the Fund Manager or Mutual Fund Distributor to solicit, sell or offer to sell the shares or units of an Investment Company to the public as defined in Rule 1 of the Implementing Rules and Regulations of the Investment Company Act (ICA IRR); c. Other professionals which the Commission may, in the future, determine as eligible to apply for ACMF Pass in other Signatory Countries. SECTION 4. Eligibility Requirements for Professionals from Other Signatory Countries. A Professional from other Signatory countries is eligible to obtain the ACMF Pass and become a Recognised Representative in the Philippines provided that he/she is licensed or registered or approved or authorised by the Home Regulator. SECTION 5. Products. The ASEAN capital market products which Recognised Representative may give advice on are limited to shares, bonds and units of collective investments scheme including units of real estate investment trust and units of infrastructure fund. The scope of advising activity is described in Section 6 of these Guidelines. SECTION 6. Scope of Activities . The Recognised Representative will be permitted to perform the following activities in the Host Jurisdiction: a. Issuing or promulgating research analysis or research reports concerning the capital market products set out in Section 5; and b. Giving general investment advice to both retail and non-retail investors concerning the capital market products set out in Section 5. aDSIHc SECTION 7. Prohibited Activities . The Recognised Representative will not be permitted to perform the following activities in the Host Jurisdiction: a. Giving advice to investors by considering investor's investment objective, financial situation and particular needs; and b. Soliciting for sales of the capital market products set out in Section 5. SECTION 8. The Recognised Representative's performance of the activities as provided in Section 5 can be through physical presence and electronic means. SECTION 9. Conditions for Servicing Retail and Non-Retail Investors . A Recognised Representative must be attached to a Licensed Firm in the Host Jurisdiction with the following conditions: a. A Recognised Representative is not required to be a full-time employee of the Licensed Firm; b. The Licensed Firm, to whom the Recognised Representative is attached to, is not required to be related to any Licensed Firms in the Home Jurisdiction; and c. A Recognised Representative is allowed to change his attachment from one Licensed Firm(s) to another Licensed Firm in the Host Jurisdiction during the validity period of his ACMF Pass. A Recognised Representative may be attached to more than one Licensed Firm at the same time; the attached Licensed Firm is obliged to monitor the conduct of the Recognised Representative and ensure that he complies with the Host Jurisdiction's laws and regulations when performing activities under the Framework in the Host Jurisdiction. SECTION 10. Validity of ACMF Pass . The validity of ACMF Pass will be for a period of two (2) years and each Recognised Representative will be permitted to perform the activities under the Framework in a Host Jurisdiction for the duration of its validity. ARTICLE THREE Renewal of the ACMF Pass SECTION 11. Renewal Coverage . The provisions under Article Three of these guidelines shall only apply to Recognized Representatives from other Signatory countries with ACMF Pass issued by the Commission. Renewal guidelines for Professionals in the Philippines with ACMF Pass issued by other Signatory countries shall be provided by respective Host Jurisdiction. SECTION 12. Renewal Criteria . The ACMF Pass of the Recognised Representative in the Philippines may be renewed provided that: a. He still possesses a valid license or registration or approval or authorization from the Home Jurisdiction; b. He has no pending disciplinary action or has not been censured, reprimanded or fined by a professional or regulatory body for negligence, incompetence, mismanagement, dereliction of duty or violation of law or regulation; ETHIDa c. Has no pending complaint filed against him/her in the Host Jurisdiction. SECTION 13. Validity of Renewal . The renewed ACMF Pass will be valid for one (1) year and may be renewed yearly. SECTION 14. Renewal Documents . The following documents are required for the renewal of the ACMF Pass: a. Copy of the certificate of registration, license or authority of the Recognized Representative issued by the Home Regulator; b. Certificate of good standing issued by the Home Regulator; c. Endorsement by the attached Licensed Firm for the renewal/non-renewal of the ACMF Pass of the Recognised Representative. The endorsement shall be signed by the Associated Person or Compliance Officer or other officer with equivalent or higher rank of the attached firm. SECTION 15. Renewal Process . The attached Licensed Firm of the Recognized Representative shall submit to the Commission the application for renewal of the ACMF Pass not later than thirty (30) days before it expires. The application for renewal of ACMF Pass shall be submitted to the Markets and Securities Regulation Department of the Commission manually and to be officially received by the Commission during office hours. SECTION 16. Grant or Denial for Renewal of ACMF Pass . The Commission shall, within thirty (30) days after the filing of any application under these Guidelines: (i) grant renewal if it determines that the requirements and qualifications for renewal set forth in these Guidelines have been satisfied; or (ii) deny said renewal stating the reason/s for the denial. ARTICLE FOUR Enforcement SECTION 17. Enforcement Action . If a Recognized Representative contravenes a Host Jurisdiction's laws and regulations, the Host Regulator will take regulatory actions against the Recognized Representative with the assistance of the Home Regulator to the extent permissible under its laws and regulations. ARTICLE FIVE Effectivity SECTION 18. Effectivity. These Guidelines shall take effect fifteen (15) days after its publication in a newspaper of general circulation. December ___, 2018, Pasay City, Philippines. cSEDTC EMILIO B. AQUINO Chairperson