Atty. Natividad B. Kwan

April 10, 2000 Atty. Natividad B. Kwan Quisumbing Torres Law Office 11th Floor, Pacific Star Bldg. Makati Ave. Cor. Sen. Gil J. Puyat Ave. Makati City Madam: This refers to your letter dated April 7, 2000 requesting confirmation on the views manifested therein relative to the performance of trust services by an offshore trust company under the situation summarized as follows. A Philippine licensed Investment House which is authorized by the Bangko Sentral ng Pilipinas to perform investment management activities empowered under Section 7 (7) of PD 129, as amended, to act as portfolio manager or financial agent, offers to its customers a basket of investments products and services that are offered by the various financial intermediaries. among these investment products and services is the investment of customer's fund in the offshore trust products of Guernsey Trustee, a foreign corporation incorporated in Guernsey . The Investment House will arrange for the establishment of individual offshore trust accounts on behalf of its customers with Guernsey Trustee. The trust instruments will be completed and executed in Guernsey. Guernsey laws will govern the offshore trust products. However, Guernsey Trustee will require the customers of the investment House, through the latter, to comply in the Philippines with certain documentary requirements in connection with the trust. The Investment House will receive the initial investment of the customers. The Investment House will then outwardly remit the customers investment to Guernsey. The customer of the investment House may course his succeeding investments under the established house either through the Investment House or directly to Guernsey Trustee. In all instances Guernsey Trustee will accept the investments in Guernsey and will administer the offshore trust in Guernsey. Neither the customer nor the Investment House will exercise any discretion in how Guernsey trustee will invest trust funds. priced On the basis of the foregoing facts, your are requesting confirmation on the following views: 1. The performance of trust services of the offshore trust company does not constitute doing business in the Philippines. Consequently, it need not apply for a license to do business in the Philippines. 2. The trust products of the offshore trustee are not securities under the Revised Securities Act. Under the facts presented, the offshore trust company is not considered doing business in the Philippines, provided, that it will not engage in any form of marketing. solicitations or offering activities of its investments products in the Philippines, and that the arrangement, acceptance, perfection and consummation of the trust instrument should be performed outside the Philippines, and provided further that the Investment House shall not receive any compensation from the offshore trust company. However, while the transaction may not be considered as doing business in the Philippines, the investments by the Investment House customers' funds in the offshore trust products shall be subject to applicable rules and regulations of the Bangko Sentral ng Pilipinas relative to portfolio management function of Investment Houses and outward foreign currency remittance. Relative to the second issue, we refrain from rendering a categorical opinion thereon as the facts contained in your letter are insufficient for us to determine whether or not the " trust products " of the offshore trustee company are considered " securities ". However, regardless of whether or not they are considered as securities, they need not be registered under the revised Securities Act for as long as they are not sold or offered in the Philippines. llcd Very truly yours, (SGD.) SONIA M. BALLO Director Corporate and Legal Department