TOAP Code of Conduct
TRUST OFFICERS ASSOCIATION OF THE PHILIPPINES
CODE OF CONDUCT AND ETHICS
We, The Trust Officers of the Philippines, implore the aid of Divine Providence in our efforts to conduct ourselves in the best interest of society, our clients, our profession, government and the institutions we work for. We also pray for moral courage and strength that we may conform to the highest standards of integrity and prudent expertise in the performance of our trust and other fiduciary responsibilities. We, the trust Officers, adhere to and uphold this Code Of Conduct and Ethics. SO HELP US GOD.
1. Coverage: This Code primarily covers Trust Officers.
2. Definition of Terms
2.1 Trust Officer, for purposes of this Code, shall be any officer or non-officer of the trust department who exercises discretion and judgment. This shall likewise apply to any Trust Officer acting as Fund Manager who is engaged in all forms of administration of property, or money and its equivalent, for the benefit of the owner or a third person.
2.2 Reasonable shall refer to what is fair, proper just moderate and suitable under the circumstances.
2.3 Self-Dealing relates to transactions wherein a trustee may be acting for his/her personal benefit and also as trustee which may give rise to conflict of interests.
2.4 Prudent Man’s Rule requires that fiduciaries manage the assets entrusted to them with the same care and discretion as well as diligence as a person of prudence, good character, and intelligence would handle his/her own affairs.
2.5 Arm’s length transaction is a transaction under which unrelated parties, each acting in his/her own best interest would carry out a particular transaction.
2.6 Trust Rules shall refer to the Rules and regulations on Trust, Other Fiduciary Business and Investment Management Activities of Financial Institutions, issued by the Bangko Sentral ng Pilipinas.
2.7 Association shall refer to the trust officers Association of the Philippines (TOAP).
3. The Trust Officer and Society
Trust Officer shall provide the social dimension to financial business by delivering by delivering trust and fund management services not prejudicial to the public good, with loyalty and integrity consistent with what is moral, just and legal.
3.1 The Trust Officer shall encourage the creation and promotion of public awareness of the different types of trust products and fund management services, and in particular, promote services that can contribute the most good for the greater number, such as but not limited to, employee benefit trust and trust for charitable or educational purposes.
3.2 The Trust Officer shall treat all his/her accounts and/or clients equitably.
3.3 The Trust Officer may refuse on moral or legal grounds to accept any business offered by any client whose integrity and character are, in the reasonable opinion of the Trust Officer, under question or are likely to impair the good reputation of the institution and the Association.
3.4 The Trust Officer shall accept and retain accounts where trust and other fiduciary services can be rendered to the mutual benefit and satisfaction of all parties, provided that the proposed account and its objective/s is humane and conforms with all legal and regulatory requirements.
3.5 The Trust Officer shall charge fees that are commensurate to the services rendered or within the range as prescribed and/or authorized by management, based on [a] the time spent, [b] the extent of business relationship, [c] the personnel required, [d] the degree of difficulty and performance in handling the account, [e] the responsibilities and risks inherent in the account, as well as [f] the nature of the fund, giving appropriate consideration where the fund is for benevolent or charitable purposes.
4. The Trust Officer and the Client
The Trust Officer shall always consider the welfare and interest of the clients as paramount. The Trust Officer shall develop and preserve the trust and confidence reposed on him/her by the client through acts of care, good faith, candor in all dealings and transactions for and in behalf of the client, and the diligence of a prudent man.
4.1 The Trust Officer shall observe utmost fidelity to clients: [a] administering the account s primarily for the interest and benefit of the client and latter’s beneficiary/ies, [b] by dealing fairly with all accounts, and [c] by avoiding conflicts of interests [self-dealing and self-serving transactions].
4.2 The Trust Officer shall keep in complete confidentially the records of the client, as well as any information acquired in the course of handling the latter’s account, except when required or requested by competent authorities.
4.3 The Trust Officer shall keep proper accounting and reporting on client’s investments. He/She shall:
4.3.1 Submit a comprehensive report of fund or investment performance as required by the existing regulations.
4.3.2 Allow the client full and complete access to all records pertaining to his/her account during office hours.
4.4 The Trust Officer shall institute appropriate controls for the administration and security of each fiduciary record/account. In this regard, the Trust Officer shall:
4.4.1 Keep the trust books and records of each fiduciary account separate and distinct from the books and records of other business.
4.4 2 Ensure that trust books and records contain full information relative to each fiduciary account
4.4.3 Keep all monies, properties, or securities received by the institution in its capacity as trustee, fiduciary or fund manager physically separate and distinct from the assets of other business
4.5 The Trust Officer shall make full disclosure to the client of all relevant information and details on the latter’s investments and seek written approval for all transactions requiring prior consent.
4.6 In accounts where the Trust Officer exercises full discretion, he/she shall ensure that all investment are carried out, foremost with the safety of the principal in mind, income only secondary, based on the prudent man’s rule.
4.7 The Trust Officer shall establish a clear and mutual understanding of the client’s guidelines, account restrictions and objectives such as, but not limited to capital preservation, liquidity, growth, investment return optimization and risk management.
4.8 The Trust Officer shall regularly comply with the terms and conditions of the agreement or documents governing the trust and other fiduciary accounts in a manner consistent with the applicable laws, rules and regulations, and this Code.
4.9 The Trust Officer shall refrain from engaging in any transaction which may actually or potentially give rise to a conflict of interest or which may unduly compromise the interest of the client such as but not limited:
4.9.1 Transactions wherein the institution directs the Trust Officer to invest trust funds in the institution’s own treasury department or other units.
4.9.2 Those transactions specifically enumerated under Section 409.3 of the Trust Rules.
4.10 The Trust Officer shall at all times transact its business in behalf of his/her clients, on an arm’s length basis.
5. The Trust Officer and Government and its Agencies
The Trust officer shall cooperate with the government and its agencies on matters relative to trust and fiduciary business, and show respect and fairness without violating the confidence and trust of his/her clients.
5.1 The Trust Officer shall keep abreast of developments in relevant laws and regulations including but not limited to securities, taxes, banking and financing, competitive industries and developments affecting the trust fund management industry
5.2 The trust Officer shall ensure continuing compliance with said regulations and procedures
6. The trust Officer and the Members of the Trust and Fund Management Profession
The Trust Officer shall uphold the integrity and dignity of the trust and fund management profession, support activities that shall promote the professional development of TOAP members
6.1 The Trust Officer shall observe mutual respect, courtesy, cooperation , friendship and professionalism with other members of the trust and fund management profession
6.2 The Trust Officer shall maintain healthy competition with trust officers of other financial institutions by refraining from practices such as misrepresentation of material facts, negative criticism or derogatory remarks against competing institutions.
6.3 The Trust Officer shall have the moral obligation to ensure that all advertising and promotional materials contain clear, factual, and all full disclosure of his/her institution’s products and services, so as not to mislead clients.
7. The Trust Officer and the Member Institution
The Trust officer shall observe loyalty towards his/her institution. He/She shall implement the decisions of the Trust Committee of the institution he works for, Provided, such decisions are not contrary to the existing Trust Rules and regulations as well as to this Code. All transactions with the institution made in behalf of his/her clients shall be carried out on an arm’s length and best effort basis in order to uphold the independence of the trust and to primarily serve the best interest of the client.
7.1 The Trust Officer in coordination with the member institution shall establish and enforce strict compliance with internal policies relating to interests. Utmost propriety shall be exercised by the Trust Officer so that he/she does not take advantage of his/her position, and information or confidences relating to his/her work.
7.2 The Trust Officer in coordination with the member institution shall observance of the highest standards of integrity and honesty
7.3 The Trust Officer in coordination with the member institution shall keep abreast of the development of skills needed for them to perform their duties and responsibilities to clients
7.4 The Trust Officer in coordination with the member institution shall ensure with existing regulations on trust business and operations, and adherence to the provisions of this Code, as well as to the rules and regulations and by-laws of the Association
7.5 The Trust Officer shall inform his/her institution directly or through his/her immediate supervisor that he/she is obligated to comply with this Code and is subject to disciplinary sanctions for violations thereof. He/She shall deliver a copy of this Code to his/her institution.
8. Sanctions
8.1 The Trust Officer shall be subject to sanctions for any violation of this Code, the Trust Rules, or such other pertinent laws, rules and regulations, while in his/her conduct of the trust business.
8.2 Sanctions can be imposed on the Trust Officer based on the procedures relative to disciplinary actions , to be devised by the Association which shall be duly resolved by the Board of Directors, and ratified by the majority of the individual members constituting a quorum in a special meeting called for that purpose, and upon ratification shall form part of this Code.
8.3 Sanctions can either be summarily imposed or after due hearing and/or deliberation of a panel.
8.4 Sanctions may either be in the nature of private or public censure
8.5 The sanctions shall be as follows:
8.5.1 First Offense: The trust officer concerned shall be admonished.
8.5.2 Second Offense: The Trust Officer concerned shall be suspended from membership in the Association for one [1] month during which time the Trust officer concerned will be denied the privileges of membership and the facilities of the Association.
8.5.3 Third Offense: Expulsion of the Trust Officer by two-thirds [2/3] vote of the individual members of the Association constituting a quorum.
9. Modification or Amendment of the CODE of Conduct and Ethics
The Association reserves the right, at any time and from time to time, upon three-fourths [3/4] vote of the individual members constituting a quorum, to review, reasonably modify or amend in whole or in part any and all provisions or guidelines of this Code; provided, that such amendment shall be made to uphold the highest standards of integrity in the profession and to promote public trust and confidence in the delivery of trust and fund management services in the Philippines.
This Code of Conduct and Ethics shall be effective for a period of one (1) year from date of adoption of this Code, after which it shall be subject to review by the individual members as per Section 9 of this Code.
ADOPTED this 24th day of May 1997 at Baguio Country Club, Baguio City, Philippines.