NextGen Day

To make it simpler and more affordable for working Filipinos to invest in reliable securities, a lawmaker stressed the importance of passing a legal framework for collective investment schemes (CIS) on Wednesday.

Rep. Joey Salceda of Albay stated during a meeting of the House Committee on Economic Affairs that because current rules do not clearly cover CIS, investors must fork over substantial sums of money to invest in “clunky” assets like real estate or enterprises.

An “arrangement where funds are pooled for the purpose of investing in securities and other investments” is referred to as a collective investment scheme.

“We frequently have “clunky” assets. This is referred to as asset divisibility in finance. The concept is that assets can be split up into infinitesimally tiny pieces, allowing even the tiniest retail investor to invest in an asset. Most of our assets cannot be distributed to smaller investors since we lack a CIS legislative framework “explained he.

“To put it simply, starting out as a retail investor is expensive. Retail investors also frequently make speculative, individual investments. Also, hiring a personal fund manager who can make wiser choices for the typical investor is expensive on an individual basis “Added he.

Salceda cited this barrier to entry as the justification for a framework for group investing.

“Because of this, we require a more robust and inclusive market for collective investment programs. Using collective investment strategies, fund management, and administration’s fixed costs are reduced “explained he.

According to him, ground rules must be established, specifically detailing the tasks and obligations of the fund manager, setting clear guidelines for the management and decision-making of the fund, and outlining custodianship arrangements.

At the hearing, the House panel established a technical working group to polish the proposal.

Real Estate Investment Trust Reinvestment Framework

In the meantime, House Bill 7525, which amends Republic Act No. 9856, the law governing real estate investment trusts (REITs), was approved by the House of Representatives on second reading.

The Occidental Negros The measure’s proponent, Rep. Gerardo Valmayor, stated that the goal of the REIT bill is to give both small and large investors the opportunity to participate in the direct ownership of the real estate.

He continued by saying that it is an alternate investment vehicle for both overseas Filipino workers and foreign investors.

The proposal, he claimed, would encourage sponsors and promoters to build, sell, and reinvest their proceeds or gains in order to increase the number of infrastructure projects that would benefit Filipinos. It would also encourage sponsors and promoters to sell REIT shares and other related securities.

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