Bourse to charge mutual funds using PSE indices

Published December 26, 2018, 12:00 AM

by manilabulletin_admin

By James A. Loyola

The Philippine Stock Exchange is planning to impose a fee for the use of its market indices by investment houses offering index funds as the bourse considers these benchmarks as its intellectual property.


In an interview PSE Chief Operating Officer Roel A. Refran said they are now soliciting public comments for its draft rules imposing the charge of the use of the PSE’s indices before submitting it to the Securities and Exchange Commission for approval.

Refran said they hope to be able to start charging the fee by the first quarter of 2019. The proposed fee is 3 basis points, or 0.03 percent of the amount of the assets under management.

“We’ve already told them that, for just benchmarking, you will not have to pay, but if you’re processing it for your basket (of funds under management), then that’s when you use the information, that’s when you have to be charged,” Refran said.

There are about 15 PSEi-tracking funds in the market and the PSE is not yet charging them, even if the funds themselves are charging the customers a management fee of up to 300 basis points, PSE president and CEO Ramon S. Monzon said.

“We’re making reasonable restrictions. I think at first, they were taken aback, because that’s previously free. So we told them, you’re using it, for the longest time it’s at no cost to you or to your client,” he said.

Monzon noted that, “today, data is very valuable information. I’m not curtailing your right to business.”

Refran pointed out that other markets in the region are already charging fund managers that use their benchmark index as their point of comparison of the yield, such as the MSCI index, which tracks several other benchmark indices or companies.

Some of the fund managers just pass on the fee to their clients, depending on their investment agreements, said Refran.

The PSEi is the 30-company index composed of some of the country’s most actively traded stock based on the parameters and methodologies that the PSE itself has created and imposed.

Aside from the PSEi, the PSE has also its All Shares Index, as well as six sectoral indices representing the Financial sector, Holding Firms, Services sector, Property sector, Industrial sector, and the Mining and Oil sector.