Messrs. Vicente R. Jayme

January 11, 1980 Messrs. Vicente R. Jayme and Michael A.P. Adams c/o Private Development Corporation of the Philippines PDCP Building, 6758 Ayala Avenue Makati, Metro Manila Gentlemen: This is in connection with your conceptual paper, "Proposal for the Establishment of a Mutual Fund Operations in the Philippines", which was presented for our consideration and which has been the subject of a series of discussions between us and your kind selves. cdlex This Commission has finally decided to allow the reactivation of the mutual fund industry sought to be initiated by your Group in line with the country's increasingly favorable investment climate and thus aid in the development and enrichment of the capital market. It may be stated, however, that you should strictly observe and/or comply with the restrictions, prohibitions and limitations imposed by RA 2629, otherwise known as the Investment Company Act, and such rules and regulations that this Commission may issue in relation thereto in order to afford protection to the investing public and to avoid the "hit and run" mutual funds operation of the 1950s. Relative to your letter-request of April 3, 1979, the Commission would not interpose any objection to the acquisition by your group of Trin-Investment Management Services, Inc. (TRINVEST) for the purpose of utilizing it as the Investment Management Company for the proposed mutual fund operations, provided that PDCP should secure clearance from the Central Bank of the Philippines. You are likewise requested to submit to this Commission for our scrutiny and approval the new Management Agreement between your Group and TRINVEST, which must conform substantially with Section 14(a) of RA 2629. Please note also that we have not seen any legal objection for TRINVEST to provide investment management services to other clients as well. With respect to the distributor organization of your proposed mutual fund operations which has been denominated as the Unit Trust Company (UTC) in your conceptual paper, you may register the same as an ordinary stock corporation, provided that said name be changed so as not to fall within the purview of Section 6 of the General Banking Act (RA 337). Once duly incorporated, you are likewise requested to submit to the Commission the Distribution Agreement relative to the distribution of shares of the fund company pursuant to Section 14(b) of RA 2629. Finally, since the first fund company proposed to be established by your group known as the "General Fund" would be borne out of Trinity Shares, Inc. one of the only two open-ended mutual fund companies existing in our country duly registered under RA 2629, you need not register the "General Fund". However, in reactivating the operations of Trinity Shares, Inc., which has remained in a relatively dormant status through the years, you have to comply with the annual reporting requirements of this Office and all sales literature and brochures for promotion, advertisement and distribution should also be filed with us (Sec. 24, RA 2629). And in the event that you would launch successively the different types of fund companies mentioned in your conceptual paper, namely, the "Bond Fund", Property Fund", Direct Investment Fund" and the "Philippine Investment Company II", each must be registered separately and independently from each other in accordance with the provisions of RA 2629. Please be advised accordingly. Very truly yours, (SGD.) ANGEL L. LIMJOCO, JR. Chairman