Atty. Severino P.R. Sumulong

October 28, 1994 Atty. Severino P.R. Sumulong Sumulong, Sumulong , Paras & Abano 8th Flr., Sagittarius Bldg H. V. De La Costa St., Salcedo Village Makati, Metro Manila S i r : This refers to your letter of October 12, 1994 inquiring whether the following "SEC Express Lane Form No. 1-F Management" can be modified by deleting the word "funds" to enable the managing corporation to effectively direct and administer the operation of the managed corporations. ". . . and to undertake, carry on, assistor participate in the promotion, organization, management, liquidation or reorganization of corporations, partnerships and other entities except the management of FUNDS, securities, portfolio or similar assets of the managed entities or corporation ." The intention of providing the above exception is to make it clear that an ordinary management corporation cannot engage in those line of business activities enumerated in the exception, that is, that the business referred to in the above purpose clause is limited only to the management of the business operation of the managed firms, but not with respect to its corporate funds, securities or investment portfolios. However, it should not be understood that the business of "fund management" is prohibited. A corporation may be allowed to engage in said line provided, however, that it secures prior approval from Bangko Sentral as the term "fund management" also includes "trust business." which is subject to the provisions of the General Banking Act, particularly Section 56-67 thereof. Likewise, should the business of funds management fall under the definition of an Investment manager/adviser of investment companies under R.A. 2629 otherwise known as the Investment Company Act, the corporation must comply with the requirements under Section 14 thereof and Article VIII of the SEC Rules and Regulations Governing Investments Companies before it can legally engage in said business. Please be advised accordingly. Very truly yours, (SGD.) FE ELOISA C. GLORIA Associate Commissioner