Body
FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.
Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.
Introduction
Attitude of the country towards modern asset and portfolio management services
We believe that there are no reservations as there are regulations allowing investment management activities to be carried out by financial institutions, provided that prior authority is obtained from the BSP.
The regulations define “investment management activity” as referring to any activity resulting from a contract or agreement primarily for financial return whereby the institution (the investment manager) binds itself to handle or manage investible funds or any investment portfolio in a representative capacity as financial or managing agent, adviser, consultant or administrator of financial or investment management, advisory, consultancy or any similar arrangement which does not create or result in a trusteeship. “Trust business” refers to any activity resulting from a trustor-trustee relationship (trusteeship) involving the appointment of a trustee by a trustor for the administration, holding, management of funds and/or properties of the trustor by the trustee for the use, benefit, or advantage of the trustor or of others called beneficiaries. “Other fiduciary business”, on the other hand, refers to any activity of a trust-licensed entity resulting from a contract or agreement whereby the bank binds itself to render services or to act in a representative capacity such as in an agency, guardianship, administratorship of wills, properties and estates, executorship, receivership, and other similar services which do not create or result in a trusteeship.
Banks which are regulated by the BSP are allowed to act as managing agent, adviser, consultant, or administrator of investment management/advisory/consultancy account, although such authority that may be obtained from the BSP is not to be construed as including the authority to engage in trust and other fiduciary business. Regarding a bank which holds a trust license or a trust entity (which also holds a trust license), such license allows it to conduct trust and other fiduciary business which includes investment management activities.
Investment houses which are primarily regulated by the SEC are likewise allowed to act as financial consultant, investment adviser or portfolio manager, although the foregoing is not to be construed as authority for such entities to engage in trust and other fiduciary business. Prior authority from the BSP should be obtained by an investment house before it can engage in investment management activities.
In addition to investment houses, the regulations allow other non-bank entities licensed or incorporated as a financial institution by the appropriate government agency or by special law or charter to apply for authority to engage in investment management activities.
In respect of investment companies, which are stock corporations primarily engaged or hold themselves out as being engaged primarily, or propose to engage, i