You are on page 1of 8

Unit Investment Trust Fund

(For Individuals and Corporates)

Account Opening Kit


Account Update Kit

Client Suitability Questionnaire (CSQ)


Risk Disclosure Statement (RDS)
Omnibus Participating Trust Agreement
SBC Trust Division
(02) 888-7372
trustmarketing@securitybank.com.ph

Trust Division
Client Suitability Questionnaire
Thank you for your interest in SBC Trust Divisions trust products and services. In accordance with BSP Circular 618 and MORB Section X410.6, we would like to profile your
risk-return orientation to enable us to present / recommend the products and/or services suitable to your needs, investment objectives and risk tolerance.
To be accomplished by Security Bank Personnel

ACCOUNT NAME

BASIC NO.

DATE

NAME OF PROFILED CLIENT

BRANCH

BRANCH CODE

OFFICE ADDRESS

CONTACT NOS.

DELIVERY MODE
Email Address
Home Address

HOME ADDRESS

CONTACT NOS.

EDUCATIONAL ATTAINMENT

CIVIL STATUS

Elementary

High School

College

Others (Please specify) _____________

JOB TITLE / NATURE OF WORK (e.g. Manager, Bank)

Single
Married

EMAIL ADDRESS:

Widowed
Others (Please specify) __________

GENDER
Male

AMOUNT YOU INTEND TO INVEST?

Office Address

Female

WHERE DO YOU INTEND TO USE THE FUND?

) CHECK THE BEST ANSWER FOR YOU:

A. Financial Prolife
1. Estimate Total Investible Funds
Below P1M

P1M up to P5M

Above P5M to P10M

Above P10M

B. Investment and Risk Profile


1. What is your primary goal in investing?

SCORE

4. What is your knowledge in investment?

SCORE

To earn regular income while preserving my capital.

Low. I know Bank Deposits, SDA, Money Market funds.

To have the potential for medium gains while accepting moderate risks.

To have the potential for large gains while accepting potential losses.

Average. Aside from deposits and other money market funds, I


also know Government Securities, Corporate Bonds and Notes,
Bond Funds, Euro Bond Funds.
High. I have knowledge of / experience in the stock market,
Equity Funds, other complex products.

2. How long do you intend to keep your investment?


Short-term (1 year or less)

Medium (1-3 years)

Long (more than 3 years)

3. How important is immediate access to your invested funds?


Very important. I may need to withdraw the income/principal anytime.

Modestly important. I may need to withdraw the income/principal in the


next 1-2 years.

Slightly important. I have no need to use the funds for the next 3 years.

5. As an investor, what is your attitude toward risk?


I cannot tolerate any losses on my investment.

I am prepared to accept a small degree of risk in return for


moderate returns.

I can tolerate a high degree of volatility in order to achieve


higher financial gains, even if this may result in substanial losses
during adverse market condition.

CLIENT SCORE: ___________________________________


CLASSIFICATION: _________________________________

C. Client Conforme
I acknowledge that the answers to the questionnaire are accurate and complete. I understand that the client suitability assessment is used as a guide for SBC Trust
/ UITF Marketing Personnel to present and recommend investment alternatives and does not provide guarantee against losses. I understand the explanation of the
SBC Trust / UITF Marketing Personnel on the results of this client suitability assessment with regard to the investment outlet/s suitable for my needs. I agree to have
made an informed decision to invest in the specificed trust product & services/UITF after having read and understood the general features of such trust product and
services/UITF stated in the covering agreements or Appendix 1 of the Declaration of Trust and provided by the SBC Trust/UITF Marketing Personnel. I will formally
inform the SBC Trust/UITF Marketing Personnel of changes to my financial situation/circumstances that would significantly change my client investment profile.

Client Signature

Date

I have explained to you in detail and discussed with you the (1) results of the Client Suitability Questionnaire, (2) basis of our recommendation, and (3) terms and
conditions of the recommended investment outlet/s for your intended Trust Products and Services/UITF.

SBC Trust / UITF Marketing Personnel

Date

BANK COPY
Participating TRUST AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This Agreement, made and executed this _______ day of _____________, 20_____ by and between:
Name of Trustor : ____________________________________________________________________________
Customer Number / Trust Account Number: _________________________________________________________
Address
: ____________________________________________________________________________
hereinafter referred to as the TRUSTOR
- and SECURITY BANK CORPORATION Trust Division, a corporation duly organized and existing under and by virtue of the laws of the Republic
of the Philippines, and authorized to perform trust and fiduciary functions, with principal office address at Security Bank Centre, 6776 Ayala Avenue,
Makati City, hereinafter referred to as the TRUSTEE;
WITNESSETH: That
WHEREAS, the TRUSTOR/s desire/s to participate in the SB _____________________________________ (the Fund), a unit investment
trust fund established and administered by the TRUSTEE under and subject to the terms of a Declaration of Trust (the Plan Rules) approved by the
TRUSTEEs Board of Directors and by the Bangko Sentral Ng Pilipinas, as may be amended from time to time in accordance with the Plan Rules and
existing regulations;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Participation and Redemption - Participation in the Fund and redemption of such participation shall be allowed only on the basis of the net asset
value of each participation unit (the NAVpu) determined in accordance with the Plan Rules. The TRUSTORs investment in the Fund shall be expressed
in terms of number of units of participation as appearing in the TRUSTORs Confirmation of Participation.
As his/her/its initial participation, the TRUSTOR/s shall transfer, convey and pay unto the TRUSTEE, _____________________________
(Participation Amount/Amount of Contribution).
Subsequent participation and redemption shall be allowed only at such frequency or at such times as provided in the Plan Rules.
2. Client Suitability Prior to the acceptance of participation, the TRUSTEE shall perform client suitability, through a Client Suitability Assessment form
which shall be acknowledged and signed by the TRUSTOR.
3. Administration and Investment of Fund - The Fund, which is the pool of trust funds from the participating trustors, shall be managed, administered
and invested by the TRUSTEE under the operation of the Plan Rules.
4. Disclosure of Investment Outlets The TRUSTEE shall make available for review by any interested participant, a list of prospective and outstanding
investment outlets for the Fund, which list shall be updated quarterly.
5. Disclosure of Risks Prior to the signing of the Agreement, the TRUSTOR shall have read and acknowledged the Risk Disclosure Statement.
6. Compensation - As compensation for the TRUSTEEs services, it shall be entitled to compensation as provided in the Plan Rules.
7. Liability of TRUSTEE Save that attributable to the TRUSTEEs fraud, bad faith, gross willful negligence, the TRUSTEE shall not be liable for any loss
or depreciation in the value of the Fund or in the value of the TRUSTORs units of participation in the Fund arising from any act done by the TRUSTEE
pursuant to the terms hereof and thereof. Neither shall the TRUSTEE be liable for refraining to do any act where such inaction in the good faith judgment
of the TRUSTEE is necessary and appropriate for the proper and advantageous administration and management of the Fund.
8. Term of Agreement This Agreement shall continue and remain in force until the full redemption of the TRUSTORs participation or upon termination
of the Fund in accordance with the Plan Rules or with laws or regulations then existing.
9. Reference Documents Incorporated herein by reference are the terms, conditions, rules and regulations in the Plan Rules, Client Suitability Assessment
form, Risk Disclosure Statement, and the Confirmation of Participation to be issued pursuant hereto.
10. The Trustor/s hereby designate/s the following Peso/FCDU account as his/her/its/their settlement account for all his/her/its/their UITF transactions:
Savings/Current Account No.: __________________________
Security Bank/Branch
: __________________________
The Trustor/s hereby expressly acknowledge/s and confirm/s that the foregoing settlement account shall be charged for the amount/s of his/her/its/their
UITF placements and shall likewise be credited for the proceeds of his/her/its/their UIT redemptions. This shall serve as the standing instruction of the
Trustor/s to the Trustee and shall remain valid unless amended or revoked by the Trustor/s in writing.
The Unit Investment Trust Fund (UITF) is a Trust Product and NOT a DEPOSIT account or an obligation of, or guaranteed, or insured by SECURITY
BANK CORPORATION or its affiliates or subsidiaries, and therefore is not insured or governed by the Philippine Deposit Insurance Corporation
(PDIC). Due to the nature of the investments, yield and potential yields cannot be guaranteed. Any income or loss arising from market fluctuations
and price volatility of the securities held by the Fund, even if invested in government securities, is for the account of the Trustor/client. As such,
units of participation in the Fund, when redeemed, may be worth more or be worth less than the Trustors/clients initial investment/contributions.
Historical performance, when presented, is purely for reference purposes and is not a guarantee of future results. Security Bank Corporation Trust
Division as Trustee is not liable for losses unless upon willful default, bad faith or gross negligence.
The Trustor hereby acknowledges that he/she has read the complete details of the Fund in the Plan Rules, made his/her own risk assessment or has
sought independent /professional advice before making the investment.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands.
(Trustor)
Security Bank Corporation Trust Division (Trustee)

CLIENT COPY
Participating TRUST AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
This Agreement, made and executed this _______ day of _____________, 20_____ by and between:
Name of Trustor : ____________________________________________________________________________
Customer Number / Trust Account Number: _________________________________________________________
Address
: ____________________________________________________________________________
hereinafter referred to as the TRUSTOR
- and SECURITY BANK CORPORATION Trust Division, a corporation duly organized and existing under and by virtue of the laws of the Republic
of the Philippines, and authorized to perform trust and fiduciary functions, with principal office address at Security Bank Centre, 6776 Ayala Avenue,
Makati City, hereinafter referred to as the TRUSTEE;
WITNESSETH: That
WHEREAS, the TRUSTOR/s desire/s to participate in the SB _____________________________________ (the Fund), a unit investment
trust fund established and administered by the TRUSTEE under and subject to the terms of a Declaration of Trust (the Plan Rules) approved by the
TRUSTEEs Board of Directors and by the Bangko Sentral Ng Pilipinas, as may be amended from time to time in accordance with the Plan Rules and
existing regulations;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Participation and Redemption - Participation in the Fund and redemption of such participation shall be allowed only on the basis of the net asset
value of each participation unit (the NAVpu) determined in accordance with the Plan Rules. The TRUSTORs investment in the Fund shall be expressed
in terms of number of units of participation as appearing in the TRUSTORs Confirmation of Participation.
As his/her/its initial participation, the TRUSTOR/s shall transfer, convey and pay unto the TRUSTEE, _____________________________
(Participation Amount/Amount of Contribution).
Subsequent participation and redemption shall be allowed only at such frequency or at such times as provided in the Plan Rules.
2. Client Suitability Prior to the acceptance of participation, the TRUSTEE shall perform client suitability, through a Client Suitability Assessment form
which shall be acknowledged and signed by the TRUSTOR.
3. Administration and Investment of Fund - The Fund, which is the pool of trust funds from the participating trustors, shall be managed, administered
and invested by the TRUSTEE under the operation of the Plan Rules.
4. Disclosure of Investment Outlets The TRUSTEE shall make available for review by any interested participant, a list of prospective and outstanding
investment outlets for the Fund, which list shall be updated quarterly.
5. Disclosure of Risks Prior to the signing of the Agreement, the TRUSTOR shall have read and acknowledged the Risk Disclosure Statement.
6. Compensation - As compensation for the TRUSTEEs services, it shall be entitled to compensation as provided in the Plan Rules.
7. Liability of TRUSTEE Save that attributable to the TRUSTEEs fraud, bad faith, gross willful negligence, the TRUSTEE shall not be liable for any loss
or depreciation in the value of the Fund or in the value of the TRUSTORs units of participation in the Fund arising from any act done by the TRUSTEE
pursuant to the terms hereof and thereof. Neither shall the TRUSTEE be liable for refraining to do any act where such inaction in the good faith judgment
of the TRUSTEE is necessary and appropriate for the proper and advantageous administration and management of the Fund.
8. Term of Agreement This Agreement shall continue and remain in force until the full redemption of the TRUSTORs participation or upon termination
of the Fund in accordance with the Plan Rules or with laws or regulations then existing.
9. Reference Documents Incorporated herein by reference are the terms, conditions, rules and regulations in the Plan Rules, Client Suitability Assessment
form, Risk Disclosure Statement, and the Confirmation of Participation to be issued pursuant hereto.
10. The Trustor/s hereby designate/s the following Peso/FCDU account as his/her/its/their settlement account for all his/her/its/their UITF transactions:
Savings/Current Account No.: __________________________
Security Bank/Branch
: __________________________
The Trustor/s hereby expressly acknowledge/s and confirm/s that the foregoing settlement account shall be charged for the amount/s of his/her/its/their
UITF placements and shall likewise be credited for the proceeds of his/her/its/their UIT redemptions. This shall serve as the standing instruction of the
Trustor/s to the Trustee and shall remain valid unless amended or revoked by the Trustor/s in writing.
The Unit Investment Trust Fund (UITF) is a Trust Product and NOT a DEPOSIT account or an obligation of, or guaranteed, or insured by SECURITY
BANK CORPORATION or its affiliates or subsidiaries, and therefore is not insured or governed by the Philippine Deposit Insurance Corporation
(PDIC). Due to the nature of the investments, yield and potential yields cannot be guaranteed. Any income or loss arising from market fluctuations
and price volatility of the securities held by the Fund, even if invested in government securities, is for the account of the Trustor/client. As such,
units of participation in the Fund, when redeemed, may be worth more or be worth less than the Trustors/clients initial investment/contributions.
Historical performance, when presented, is purely for reference purposes and is not a guarantee of future results. Security Bank Corporation Trust
Division as Trustee is not liable for losses unless upon willful default, bad faith or gross negligence.
The Trustor hereby acknowledges that he/she has read the complete details of the Fund in the Plan Rules, made his/her own risk assessment or has
sought independent /professional advice before making the investment.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands.
(Trustor)
Security Bank Corporation Trust Division (Trustee)

CLIENT COPY

Unit Investment Trust Funds


RISK DISCLOSURE STATEMENT

Prior to making an investment, SECURITY BANK CORPORATION Trust Division (SBC Trust) is hereby informing you of the nature of the Unit Investment Trust Funds ( UITFs)/ Trust/ Other Fiduciary Investment
Management Accounts and the risks involved in investing therein. As investments generally carry different degrees of risk, it is necessary that before you participate in any of SBC Trust UITFs and/or make
any investment of your funds under your Trust/ Other Fiduciary/ Investment Management Account/s, you have:
1. fully understood the nature of the investments in any of the UITFs / Trust/ Other Fiduciary/ Investment Management Account and the extent of your exposure to risks;
2. read this Risk Disclosure Statement completely; and
3. independently determined that the investment in any of the UITFs and/or the investments that you may authorize us under your Trust/ Other Fiduciary/ Investment Management Accounts, is appropriate for you.
Examples of fixed income securities are bank deposits and deposit substitutes, government securities, debt instruments such as private corporate bonds or notes, and direct loans. On the other hand, equity
investments or alternatively referred to as investment in shares of stocks may be listed or not listed, or may be in the form of common shares or preferred shares. Structured Product is a combination of a
financial instrument vehicle with one or more derivatives to form a new investment instrument. In each type of these investments, there are risks involved whether such investments are Peso denominated or in
FCDU.
Enumerated and defined below are the various risks you are normally exposed in investing, depending on the type of UITF you participated in or the underlying assets of your portfolio made for your
Trust/ Other Fiduciary/ Investment Management Account. UITFs/ Trust/ Other Fiduciary/ Investment Management Accounts do not provide guaranteed returns and are not covered by the Philippine
Deposit Insurance Corporation.
Specifically for UITFs, there are risks involved because the value of your investment is based on Net Asset Value per Unit ( NAVPU) of the Fund which uses a marked-to-market valuation and therefore may
fluctuate daily. The NAVPU is computed by dividing the Net Asset Value (NAV) of the Fund by the number of outstanding units. The NAV is derived from the summation of the market value of the underlying
securities of the Fund plus accrued interest income, less liabilities and qualified expenses.
INVESTMENT IN THE UITF DOES NOT PROVIDE GUARANTEED RETURNS EVEN IF INVESTED IN GOVERNMENT SECURITIES AND HIGH GRADE PRIME INVESTMENT OUTLETS. YOUR PRINCIPAL AND
EARNINGS FROM INVESTMENT IN THE FUND CAN BE LOST IN WHOLE OR IN PART WHEN THE NAVPU AT THE TIME OF REDEMPTION IS LOWER THAN THE NAVPU AT THE TIME OF PARTICIPATION.
GAINS FROM INVESTMENT IS REALIZED WHEN THE NAVPU AT THE TIME OF REDEMPTION IS HIGHER THAN THE NAVPU AT THE TIME OF PARTICIPATION.
Your investment in any of SBC TRUST UITFs/ Trust/ Other Fiduciary/ Investment Management Accounts (Funds) exposes you to various types of risks enumerated and defined hereunder:
Interest Rate Risk. This is the possibility for your investment portfolio to experience losses due to changes in interest rates. The purchase and sale of a debt instrument may result in profit or loss because
the value of a debt instrument changes inversely with prevailing interest rates.
Your Funds investment portfolio, being marked-to-market, is affected by changes in interest rates thereby affecting the value of fixed income investments such as government securities and corporate
bonds. Interest rate changes may affect the prices of fixed income securities inversely, i.e. as interest rates rise, bonds prices fall and when interest rates decline, bonds prices rise. As the prices of the
bonds held by your account adjust to a rise in interest rates, the market value of your investment portfolio may decline.
Market/Price Risk. This is the possibility for your Funds investment portfolio to experience losses due to changes in market prices of equities or bonds. It is the exposure of the uncertain market value
of these investments due to price fluctuations.
It is the risk of the investment portfolio to lose value due to a decline in securities prices, which may sometimes happen rapidly. The value of investments fluctuates over a given period of time because
of general market conditions, economic changes or other events that impact large portions of the market such as political events, natural calamities, etc. As a result, the market value of your investment
portfolio may increase to make profit or decrease to incur loss.
Liquidity Risk. This is the possibility for your Funds investment portfolio to experience losses due to the inability to sell or convert the investments into cash immediately or in instances where conversion
to cash is possible but at a loss. This may be caused by different reasons such as trading in securities with small or few outstanding issues, absence of buyers, limited buy/sell activity or underdeveloped
capital market.
Liquidity risk occurs when certain investments in the portfolio may be difficult or impossible to sell at a particular time which may prevent allowing withdrawal from the account with until its assets can be
converted to cash. Even government securities which are the most liquid fixed income securities may be subjected to liquidity risk particularly when a sizeable volume is involved.
Credit Risk/ Default Risk. This is the possibility for your Funds investment portfolio to experience losses due to a borrowers or issuers failure to pay principal and/or interest in a timely manner on
instruments such as bonds, loans, or other forms of security which the borrower issued. This inability of the borrower/issuer to make good on its financial obligations may be a result of adverse changes
in its financial condition, thus, lowering credit quality of the security, and consequently lowering the price (market/price risk) which contributes to the difficulty in selling such security in the open market.
It also includes risk on a counterparty (a party SBC Trust trades with/ places funds with) defaulting on a contract to deliver its obligation either in cash or securities.
This is the risk of losing value in your investment portfolio in the event the borrower/issuer defaults on its obligation or in the case of a counterparty, when it fails to deliver on the agreed trade or pays the
maturity value of the placement made with it. The decline in the value of the investment portfolio happens when the default/failure of the issuer or counterparty to pay its obligation would make the price
of the security go down and may make the security difficult to sell or in terms of a direct loan or placement with the counterparty, the amount so exposed to it would not be re-invested on maturity date. As
this happens, your investment portfolio will be affected by a decline in value.
Reinvestment Risk. This is the risk associated with the possibility of having lower returns or earnings when maturing funds or the interest earnings of funds are reinvested.
When a pretermination and/or sale of investment/s is necessary to fund withdrawals/ redemptions and the intended withdrawal/redemption was cancelled for whatever reason, you also run the risk of
reinvesting such funds in an alternative investment outlet with lower yields. Similarly, SBC Trust is faced with the risk of not being able to find good or better alternative investment outlets as some of the
securities in the fund matures.
In case of a foreign currency denominated investments, your investment portfolio is also exposed to the following risks:
Foreign Exchange Risk. This is the possibility for the investment portfolio to experience losses due to fluctuations in foreign exchange rates. The exchange rates depend upon a variety of global and local
factors such as interest rates, economic performance, and political developments.
It is the risk of the foreign currency denominated investments to currency fluctuations when the value of such investments denominated in currencies other than the base currency (Peso) depreciates. Conversely,
it is the risk of the investment portfolio to lose value when the base currency (Peso) appreciates.
Country Risk. This is the possibility for the investment portfolio to experience losses arising from investments in securities issued by/in foreign countries due to changes in the political, economic and social
structures of such countries. There are risks in foreign investments due to the possible internal and external conflicts, currency devaluations, foreign ownership limitations and fiscal/monetary policies of the
foreign country involved which are difficult to predict but must be taken into account in making such investments.
Likewise, brokerage commissions and other fees may be higher in foreign securities. Government supervision and regulations of foreign stock exchanges, currency markets, trading systems and brokers
may be less than those in the Philippines. The procedures and rules governing foreign transactions and custody of securities may also involve delays in payment, delivery or recovery of investments.
Other Risks. Your investment portfolio may be further exposed to the risk of any actual or potential conflicts of interest in the handling of the in-house or related party transactions by the trust entity,
in our case, SBC Trust. These transactions may include own-bank deposits; purchase of own-institution or affiliate obligations (stocks, mortgages); purchase of assets from or sales of investments to own
institution, directors, officers, subsidiaries or other related interest/parties; or purchases or sales of investments between its own fiduciary/managed accounts.
Risks from Structured Products/ Hedging Instruments. If your Funds investment portfolio shall consist of structured products or hedging instruments, these products/instruments involve a variety of
significant risks. They generally carry higher risks than those associated with ordinary bank investments and are therefore not a suitable substitute for savings or time deposits. Risks associated with
these types of products could include market risk, price risk or liquidity risk or a combination of any one of these risks. The underlying securities/reference rates of structured products can be subject to
adverse movements of prices/reference rates and therefore, your investment portfolio could experience a sudden and sharp fall in value such that you may lose your entire investment, and, whenever
applicable, be obligated to provide extra funding in case it is required to pay more later. They are also generally not liquid because there is no exchange or secondary trading market through which
you can dispose of these instruments. Bid and offer prices for these instruments may not be quoted in the open market and consequently fair price may be difficult to establish. In case of termination
of a structured product prior to the specified termination date, the cost of early termination may be substantial. Pre-termination may reduce the expected return or the investment amount, even in the
case of principal protected structured products.
INVESTMENTS OF YOUR FUNDS WITH SBC TRUST DO NOT PROVIDE GUARANTEED RETURNS EVEN IF INVESTED IN GOVERNMENT SECURITIES OR IN HIGH GRADE, PRIME INVESTMENT OUTLETS.
YOUR FUNDS PRINCIPAL AND EARNINGS FROM INVESTMENTS MADE CAN BE LOST IN WHOLE OR IN PART WHEN THE CURRENT MARKET VALUE OF THE INVESTMENT IS LOWER THAN THE
MARKET VALUE AT THE TIME OF INVESTMENT. GAINS FROM INVESTMENTS ARE ONLY REALIZED WHEN THERE IS ACTUAL SALE OF THE INVESTMENTS AND THE MARKET VALUE AT THE TIME
OF SALE IS HIGHER THAN THE ACQUISITION COST AT THE TIME OF INVESTMENT.
I/ WE HAVE COMPLETELY READ AND FULLY UNDERSTOOD THIS RISK DISCLOSURE STATEMENT AND THE SAME WAS CLEARLY EXPLAINED TO ME/US BY SBC TRUST/ UNIT INVESTMENT TRUST
SALES OFFICER BEFORE I/WE AFFIXED MY/OUR SIGNATURE/S HEREIN. I HEREBY VOLUNTARILY AND WILLINGLY AGREE TO COMPLY WITH ANY AND ALL LAWS, REGULATIONS, THE PLAN
RULES, TERMS AND CONDITIONS GOVERNING MY/OUR INVESTMENT IN SBC TRUST UITFS/ TRUST/ OTHER FIDUCIARY/ INVESTMENT MANAGEMENT ACCOUNTS.

Signature over Printed Name

Date

I acknowledge that I have (1) advised the client to read this Risk Disclosure Statement, (2) encouraged the client to ask questions on matters contained in this Risks Disclosure
Statement, and (3) fully explained the same to the client.

Signature over Printed Name/Position of SBC Trust/UITF Sales Officer

Date

BANK COPY

Unit Investment Trust Funds


RISK DISCLOSURE STATEMENT

Prior to making an investment, SECURITY BANK CORPORATION Trust Division (SBC Trust) is hereby informing you of the nature of the Unit Investment Trust Funds ( UITFs)/ Trust/ Other Fiduciary Investment
Management Accounts and the risks involved in investing therein. As investments generally carry different degrees of risk, it is necessary that before you participate in any of SBC Trust UITFs and/or make
any investment of your funds under your Trust/ Other Fiduciary/ Investment Management Account/s, you have:
1. fully understood the nature of the investments in any of the UITFs / Trust/ Other Fiduciary/ Investment Management Account and the extent of your exposure to risks;
2. read this Risk Disclosure Statement completely; and
3. independently determined that the investment in any of the UITFs and/or the investments that you may authorize us under your Trust/ Other Fiduciary/ Investment Management Accounts, is appropriate for you.
Examples of fixed income securities are bank deposits and deposit substitutes, government securities, debt instruments such as private corporate bonds or notes, and direct loans. On the other hand, equity
investments or alternatively referred to as investment in shares of stocks may be listed or not listed, or may be in the form of common shares or preferred shares. Structured Product is a combination of a
financial instrument vehicle with one or more derivatives to form a new investment instrument. In each type of these investments, there are risks involved whether such investments are Peso denominated or in
FCDU.
Enumerated and defined below are the various risks you are normally exposed in investing, depending on the type of UITF you participated in or the underlying assets of your portfolio made for your
Trust/ Other Fiduciary/ Investment Management Account. UITFs/ Trust/ Other Fiduciary/ Investment Management Accounts do not provide guaranteed returns and are not covered by the Philippine
Deposit Insurance Corporation.
Specifically for UITFs, there are risks involved because the value of your investment is based on Net Asset Value per Unit ( NAVPU) of the Fund which uses a marked-to-market valuation and therefore may
fluctuate daily. The NAVPU is computed by dividing the Net Asset Value (NAV) of the Fund by the number of outstanding units. The NAV is derived from the summation of the market value of the underlying
securities of the Fund plus accrued interest income, less liabilities and qualified expenses.
INVESTMENT IN THE UITF DOES NOT PROVIDE GUARANTEED RETURNS EVEN IF INVESTED IN GOVERNMENT SECURITIES AND HIGH GRADE PRIME INVESTMENT OUTLETS. YOUR PRINCIPAL AND
EARNINGS FROM INVESTMENT IN THE FUND CAN BE LOST IN WHOLE OR IN PART WHEN THE NAVPU AT THE TIME OF REDEMPTION IS LOWER THAN THE NAVPU AT THE TIME OF PARTICIPATION.
GAINS FROM INVESTMENT IS REALIZED WHEN THE NAVPU AT THE TIME OF REDEMPTION IS HIGHER THAN THE NAVPU AT THE TIME OF PARTICIPATION.
Your investment in any of SBC TRUST UITFs/ Trust/ Other Fiduciary/ Investment Management Accounts (Funds) exposes you to various types of risks enumerated and defined hereunder:
Interest Rate Risk. This is the possibility for your investment portfolio to experience losses due to changes in interest rates. The purchase and sale of a debt instrument may result in profit or loss because
the value of a debt instrument changes inversely with prevailing interest rates.
Your Funds investment portfolio, being marked-to-market, is affected by changes in interest rates thereby affecting the value of fixed income investments such as government securities and corporate
bonds. Interest rate changes may affect the prices of fixed income securities inversely, i.e. as interest rates rise, bonds prices fall and when interest rates decline, bonds prices rise. As the prices of the
bonds held by your account adjust to a rise in interest rates, the market value of your investment portfolio may decline.
Market/Price Risk. This is the possibility for your Funds investment portfolio to experience losses due to changes in market prices of equities or bonds. It is the exposure of the uncertain market value
of these investments due to price fluctuations.
It is the risk of the investment portfolio to lose value due to a decline in securities prices, which may sometimes happen rapidly. The value of investments fluctuates over a given period of time because
of general market conditions, economic changes or other events that impact large portions of the market such as political events, natural calamities, etc. As a result, the market value of your investment
portfolio may increase to make profit or decrease to incur loss.
Liquidity Risk. This is the possibility for your Funds investment portfolio to experience losses due to the inability to sell or convert the investments into cash immediately or in instances where conversion
to cash is possible but at a loss. This may be caused by different reasons such as trading in securities with small or few outstanding issues, absence of buyers, limited buy/sell activity or underdeveloped
capital market.
Liquidity risk occurs when certain investments in the portfolio may be difficult or impossible to sell at a particular time which may prevent allowing withdrawal from the account with until its assets can be
converted to cash. Even government securities which are the most liquid fixed income securities may be subjected to liquidity risk particularly when a sizeable volume is involved.
Credit Risk/ Default Risk. This is the possibility for your Funds investment portfolio to experience losses due to a borrowers or issuers failure to pay principal and/or interest in a timely manner on
instruments such as bonds, loans, or other forms of security which the borrower issued. This inability of the borrower/issuer to make good on its financial obligations may be a result of adverse changes
in its financial condition, thus, lowering credit quality of the security, and consequently lowering the price (market/price risk) which contributes to the difficulty in selling such security in the open market.
It also includes risk on a counterparty (a party SBC Trust trades with/ places funds with) defaulting on a contract to deliver its obligation either in cash or securities.
This is the risk of losing value in your investment portfolio in the event the borrower/issuer defaults on its obligation or in the case of a counterparty, when it fails to deliver on the agreed trade or pays the
maturity value of the placement made with it. The decline in the value of the investment portfolio happens when the default/failure of the issuer or counterparty to pay its obligation would make the price
of the security go down and may make the security difficult to sell or in terms of a direct loan or placement with the counterparty, the amount so exposed to it would not be re-invested on maturity date. As
this happens, your investment portfolio will be affected by a decline in value.
Reinvestment Risk. This is the risk associated with the possibility of having lower returns or earnings when maturing funds or the interest earnings of funds are reinvested.
When a pretermination and/or sale of investment/s is necessary to fund withdrawals/ redemptions and the intended withdrawal/redemption was cancelled for whatever reason, you also run the risk of
reinvesting such funds in an alternative investment outlet with lower yields. Similarly, SBC Trust is faced with the risk of not being able to find good or better alternative investment outlets as some of the
securities in the fund matures.
In case of a foreign currency denominated investments, your investment portfolio is also exposed to the following risks:
Foreign Exchange Risk. This is the possibility for the investment portfolio to experience losses due to fluctuations in foreign exchange rates. The exchange rates depend upon a variety of global and local
factors such as interest rates, economic performance, and political developments.
It is the risk of the foreign currency denominated investments to currency fluctuations when the value of such investments denominated in currencies other than the base currency (Peso) depreciates. Conversely,
it is the risk of the investment portfolio to lose value when the base currency (Peso) appreciates.
Country Risk. This is the possibility for the investment portfolio to experience losses arising from investments in securities issued by/in foreign countries due to changes in the political, economic and social
structures of such countries. There are risks in foreign investments due to the possible internal and external conflicts, currency devaluations, foreign ownership limitations and fiscal/monetary policies of the
foreign country involved which are difficult to predict but must be taken into account in making such investments.
Likewise, brokerage commissions and other fees may be higher in foreign securities. Government supervision and regulations of foreign stock exchanges, currency markets, trading systems and brokers
may be less than those in the Philippines. The procedures and rules governing foreign transactions and custody of securities may also involve delays in payment, delivery or recovery of investments.
Other Risks. Your investment portfolio may be further exposed to the risk of any actual or potential conflicts of interest in the handling of the in-house or related party transactions by the trust entity,
in our case, SBC Trust. These transactions may include own-bank deposits; purchase of own-institution or affiliate obligations (stocks, mortgages); purchase of assets from or sales of investments to own
institution, directors, officers, subsidiaries or other related interest/parties; or purchases or sales of investments between its own fiduciary/managed accounts.
Risks from Structured Products/ Hedging Instruments. If your Funds investment portfolio shall consist of structured products or hedging instruments, these products/instruments involve a variety of
significant risks. They generally carry higher risks than those associated with ordinary bank investments and are therefore not a suitable substitute for savings or time deposits. Risks associated with
these types of products could include market risk, price risk or liquidity risk or a combination of any one of these risks. The underlying securities/reference rates of structured products can be subject to
adverse movements of prices/reference rates and therefore, your investment portfolio could experience a sudden and sharp fall in value such that you may lose your entire investment, and, whenever
applicable, be obligated to provide extra funding in case it is required to pay more later. They are also generally not liquid because there is no exchange or secondary trading market through which
you can dispose of these instruments. Bid and offer prices for these instruments may not be quoted in the open market and consequently fair price may be difficult to establish. In case of termination
of a structured product prior to the specified termination date, the cost of early termination may be substantial. Pre-termination may reduce the expected return or the investment amount, even in the
case of principal protected structured products.
INVESTMENTS OF YOUR FUNDS WITH SBC TRUST DO NOT PROVIDE GUARANTEED RETURNS EVEN IF INVESTED IN GOVERNMENT SECURITIES OR IN HIGH GRADE, PRIME INVESTMENT OUTLETS.
YOUR FUNDS PRINCIPAL AND EARNINGS FROM INVESTMENTS MADE CAN BE LOST IN WHOLE OR IN PART WHEN THE CURRENT MARKET VALUE OF THE INVESTMENT IS LOWER THAN THE
MARKET VALUE AT THE TIME OF INVESTMENT. GAINS FROM INVESTMENTS ARE ONLY REALIZED WHEN THERE IS ACTUAL SALE OF THE INVESTMENTS AND THE MARKET VALUE AT THE TIME
OF SALE IS HIGHER THAN THE ACQUISITION COST AT THE TIME OF INVESTMENT.
I/ WE HAVE COMPLETELY READ AND FULLY UNDERSTOOD THIS RISK DISCLOSURE STATEMENT AND THE SAME WAS CLEARLY EXPLAINED TO ME/US BY SBC TRUST/ UNIT INVESTMENT TRUST
SALES OFFICER BEFORE I/WE AFFIXED MY/OUR SIGNATURE/S HEREIN. I HEREBY VOLUNTARILY AND WILLINGLY AGREE TO COMPLY WITH ANY AND ALL LAWS, REGULATIONS, THE PLAN
RULES, TERMS AND CONDITIONS GOVERNING MY/OUR INVESTMENT IN SBC TRUST UITFS/ TRUST/ OTHER FIDUCIARY/ INVESTMENT MANAGEMENT ACCOUNTS.

Signature over Printed Name

Date

I acknowledge that I have (1) advised the client to read this Risk Disclosure Statement, (2) encouraged the client to ask questions on matters contained in this Risks Disclosure
Statement, and (3) fully explained the same to the client.

Signature over Printed Name/Position of SBC Trust/UITF Sales Officer

Date

You might also like