SEC: PERA administrators must hold gov’t securities equivalent to 1% of total assets

THE Securities and Exchange Commission (SEC) said that registered personal equity and retirement account (PERA) administrators should hold government securities equivalent to 1% of the book value of their total assets.

The SEC issued Memorandum Circular (MC) No. 14 on Sept. 19, which provided guidelines for the accreditation of market participants offering PERA investment products, pursuant to Republic Act No. 9505, or the PERA Act of 2008, and its implementing rules and regulations (IRR).

“In accordance with the PERA IRR, the SEC guidelines also require registered PERA administrators to hold government securities equivalent to 1% of the book value of the total volume of PERA assets administered or such other amount as the SEC may impose, earmarked in favor of the commission,” the SEC said in an e-mailed statement on Tuesday.

“This will serve as security for the faithful performance of its duties. The amount shall be in addition to and shall be treated separately from the capital, surplus, and undivided profits of the administrator,” it added.

PERA refers to a voluntary saving program that supplements retirement benefits from the state-led Social Security System and Government Service Insurance System. Some of the PERA investment products include a unit investment trust fund and mutual fund.

According to the commission, those eligible to apply as PERA administrators include securities brokers, investment houses, and investment company advisers or fund managers.

On the other hand, investment company advisers or fund managers may register as investment managers.

“Other entities or individuals as may be determined by the commission as having the qualifications to be accredited as administrator or investment manager may also apply,” the SEC said.

To become eligible as a PERA administrator, the applicant must have a net worth of at least P100 million at all times, as well as the technical expertise and personnel to administer all types of PERA investment products.

“The applicant must also submit proof that it has sufficient personnel who have undergone the requisite training prescribed or approved by the commission to educate PERA contributors on the nature of a PERA and the requirements, risks, and benefits of the investment product, among others,” the SEC said.

Meanwhile, those applying as PERA investment managers must have written supervision and control procedures for the conduct of the investment management functions, with proof of at least five years’ experience in professional investment management.

The SEC temporarily reduced the security deposit amount to 0.0% of the book value of the total volume of PERA assets administered to encourage applications as PERA administrators.

Interested applicants must file an application for the issuance of a Qualification Certificate with the SEC Markets and Securities Regulation department. — Revin Mikhael D. Ochave