Press Release
January 22, 2010


Senator Edgardo J. Angara today said that the country needs a Collective Investment Schemes (CIS) bill in order to establish a comprehensive regulatory framework for all forms of CIS and to catch up with the worldwide trend in CIS regulation.

"The worldwide trend in the regulation of collective investment schemes (CIS) is to have single law to regulate all types of CIS. Countries such as the United Kingdom, Japan, Australia, Korea and Singapore have adopted this approach. In the Philippines however, investment companies (mutual funds) and unit investment trust funds (UITFs), the most common forms of CIS, are still governed by varying laws and regulations," said Angara who chairs the Senate Committee on Finance.

He added, "As such, there are differences in regulatory requirements (regulatory arbitrage) and taxation among the different forms of CIS, even though the investment products they offer to the public are essentially the same."

Angara cited that this regulatory arbitrage gives rise to an uneven playing field which will prove unfavorable to the growth of the industry. More importantly, such regulatory arbitrage will result in uneven levels of protection to the investing public.

The senator, who formerly chairs the Senate Committee on Banks, Financial Institutions and Currencies, filed SB 1181 which proposes to establish a comprehensive regulatory framework for all forms of CIS that seeks to eliminate existing differences in regulatory treatment.

He shared that this bill seeks to balance the interests of the investors, by incorporating mechanisms that would safeguard the public interest, at the same time recognizing the interests of the other parties involved in the CIS industry, by giving them flexibility to expand their CIS businesses.

"With the passage of this bill, it is anticipated that even middle to low income individuals will explore more investment opportunities in CIS, thereby gaining access to the capital markets. The economy, in turn, is expected to benefit greatly from an expanded capital base," added Angara.

CISL is one of the priority bills of Angara which he aims to be ratified at least before the end of the current Congress.

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