11.2 Plan Rules Amendments and Participant Notices

Plan Rules are the living constitution of a UITF

Section 11.1 covered how a fund is born. This section covers how a fund may change after it is live—without turning the branch into a place where sales staff improvise new objectives on the fly.

Under Circular 1152, each UITF is governed by a written trust agreement drawn by the trustee—the Plan (Plan Rules)—approved by the trustee’s board of directors and submitted to BSP under the creation provisions. The Plan states, among other minimum elements:

• Title / brand name and classification (money market, fixed income, multi-asset, equity)
• Structure (feeder, FoF, multi-class) and whether the fund has an income distribution feature
• Investment objectives, policies, limitations, and target asset allocation
• For money market and fixed income funds, intended weighted average portfolio life (or duration/tenor measures for feeder/FoF structures as applicable)
• Distributing-fund income policy; multi-class distinctive features
• Benchmark description and how performance will be measured
• Admission/redemption terms
• Other rights necessary to define participant interests

A copy of the Plan must be available for inspection during regular office hours and furnished on request. That transparency is not optional customer service—it is regulatory design.

Who may amend the Plan?

The Plan may be amended by a resolution of the trustee’s board of directors, subject to Circular 1152 requirements. Marketing personnel, relationship managers, and even trust officers cannot amend Plan Rules by email, chat, or verbal promise to a preferred client.

Two amendment tracks exist:

1. Material amendments → board approval plus written notification to BSP (and participant notices)
2. Other amendments (not on the material list) → board approval only (plus participant notices)

Material amendments that must be notified to BSP

Circular 1152 enumerates amendments involving any of the following aspects. Each is a written notification event to the Bangko Sentral:

Study tip: If the change alters what the fund is trying to do, how risky it is designed to be, how performance is judged, what it costs, who safekeeps assets, how NAVPU is built, where a feeder/FoF points, or whether funds merge, treat it as BSP-notifiable material.

Material amendments are considered a permissible activity subject to a Type “C” License under the applicable licensing section—same Type C family as notification-mode creation, different form package.

Filing timeline and package

Within ten (10) banking days from board approval of the amendment(s), the TE submits to the appropriate BSP supervising department:

1. Letter from the president or officer of equivalent rank informing BSP of the amendment(s)
2. Duly accomplished Amendment(s) of a UITF form detailing Plan/appendix changes and the purpose of the amendment
3. Board-approved Amended Plan and related appendices
4. Corporate secretary’s certificate on board approval of the amendments
5. Joint certification by president (or equivalent) and chief compliance officer on prudential compliance, completeness of notice/Plan minimums, consistency of Plan Rules/appendices, and KIIDS alignment with Plan Rules
6. Other documents BSP may require

BSP reserves the right to issue a notice of objection within thirty (30) calendar days from the date of receipt of the notification on the amendment(s).

Contrast the clocks you must not mix:

Non-material amendments

All other amendments that do not involve the enumerated material aspects require only approval of the TE’s board of directors—no Circular 1152 material-amendment notification package to BSP. That does not mean silence toward participants (see below). It also does not mean sales staff can “clarify” objectives orally without board process.

If a so-called “housekeeping” edit quietly rewrites the risk profile or fee schedule, it is not housekeeping—it is material.

Participant notice: ≥30 calendar days and the exit right

Circular 1152’s investor-protection core for amendments:

The TE shall notify each of the UITF participants in writing, either in electronic or printed form, of any of the amendments to a fund. Participants shall be given at least thirty (30) calendar days prior to the implementation of any amendment to a UITF to withdraw their participations in the fund if they are not in conformity with the amendment.

Break the rule into exam pieces:

Worked branch scenario

• Board approves an increase in the trust fee of a peso bond UITF (material item: fees and other charges).
• Within 10 banking days, TE files the BSP amendment notification package.
• TE emails/prints notices to all participants stating the fee change and effective date.
• Effective date is set at least 30 calendar days after notice.
• Client Ana disagrees with the higher fee → she may redeem/withdraw under Plan Rules before the amendment bites, rather than being forced into a new cost structure without exit time.

CUSP personnel should never tell Ana, “You already signed, so you have no rights when fees change.” The circular gives a prior-notice exit window.

Other notices to BSP (operational events)

Separate from Plan amendment notifications, Circular 1152 requires the TE to advise BSP in writing prior to implementation of:

1. A change in the name of a UITF
2. A change in the cut-off time for admission/redemption
3. A suspension of NAVPU calculation or of admission/redemption
4. The termination of a fund

For urgent situations involving cut-off changes and suspensions of NAVPU calculation/admission/redemption, a post-notification may be submitted to BSP within two (2) banking days from occurrence, stating details and the period the change/suspension is in effect.

These operational notices protect the supervisory record when dealing mechanics freeze or product identity changes—even when investment objective text is untouched.

Reclassification vs amendment (do not confuse Section 11.1)

If an “amendment” effectively converts the fund to another category (for example, turning a money market mandate into an equity mandate), Circular 1152 routes that event through the creation framework (prior approval or notification as applicable)—not merely the lighter “other amendments” board-only path. Material amendment notice and reclassification creation rules can both matter in real governance; on the exam, ask: Did the category itself change?

Marketing and sales discipline around amendments

After an amendment:

1. Update KIIDS / PHS / approved marketing materials so they match the Amended Plan.
2. Do not continue using old fee tables or old risk language.
3. Re-check CSA product mapping if risk profile or objective changed—moderate clients may no longer fit a re-risked mandate.
4. Answer client questions with the notice contents, not with improvised guarantees (“BSP always lets us change this”).
5. Never present a pending amendment as already effective before the notice period and implementation date.

Exam traps for plan amendments

1. 30 days for BSP filing of amendments — wrong; filing is 10 banking days from board approval; 30 calendar days is the participant prior-notice (and also BSP’s objection window for amendment notifications).
2. Confusing 30-day participant notice with 60-day creation objection — different clocks.
3. Claiming only material amendments need participant notice — Circular 1152 requires participant notice of any amendment, with ≥30 calendar days to withdraw if not in conformity.
4. Letting sales staff amend fees verbally — only board (and BSP path if material) can change Plan economics.
5. Ignoring fee, benchmark, custodian, or target-fund changes as “admin” — they are on the material list.
6. Forgetting KIIDS realignment — joint certifications expressly address KIIDS alignment with Plan Rules.

One-liner to memorize

Material Plan changes (objectives, risk, benchmark, targets, distributing policy, NAVPU basis, custodian, fees, separate IM, mergers) → board + notify BSP within 10 banking days (BSP may object in 30 calendar days); every amendment → written participant notice ≥30 calendar days before implementation with right to withdraw if not in conformity.