5: Kode ng Etica at kondukto

Question 1

Why Ethics?
 Why talk about ethics?
 Is it relevant to the trust and fiduciary business?
 Can ethics be taught?

Answer 1

 Protect the Trust customers
 Improve efficiency
 Expand compliance efforts
 Increased shareholder confidence
 Enhanced productivity
 Attract and retain a quality workforce

Question 2

The importance of ethics in organizations

 Ethics are the principles and values an individual uses to ____________________________
 In an organization, a code of ethics is a set of principles that _____________________ in its programs, policies and decisions for the business
 The ethical philosophy an organization uses to conduct businesscan _____________________________________________________

Answer 2

 govern his activities and decisions
 guide the organization
 affect the reputation, productivity and bottom line of the business

Question 3

Statement of Principles

Answer 3

1. Prudent administration
2. Undivided loyalty and utmost care
3. Non-delegation of responsibilities
4. Preserving and protecting property
5. Keeping and rendering accounts

Question 4

accounts shall be administered in conformity with the intention and purpose of the client as manifested in the agreement and with the skill, care, prudence and diligence necessary under the circumstance then prevailing that a prudent man acting in like capacity.

Answer 4

Prudent administration

Question 5

the interest of the client shall be placed above those of the bank. Fiduciary assets shall be objectively and fairly administered, invested and distributed giving due regard to the beneficiaries’ respective interest.

Answer 5

Undivided loyalty and utmost care

Question 6

Trust responsibilities shall not be delegated as the client’s confidence is reposed to the Trust Entity

Answer 6

Non-delegation of responsibilities

Question 7

Reasonable care and diligence shall be observed to preserve and protect the property entrusted.

Answer 7

Preserving and protecting property

Question 8

Accurate record of transactions shall be kept and rendered to the clients. Likewise, material facts within the knowledge or reasonably discovered by the Trust Entity, particularly that would enable the clients to make well- informed decisions shall be promptly transmitted/relayed to the clients for them to protect their interests.

Answer 8

Keeping and rendering accounts

Question 9

cardinal principle common to all trust and fiduciary relationships

Answer 9

Fidelity

Question 10

Policies predicated upon fidelity shall be directed towards the observance of the following:

Answer 10

1. Prudent administration
2. Undivided loyalty and utmost care
3. Non-delegation of responsibilities
4. Preserving and protecting property
5. Keeping and rendering accounts

Question 11

accounts shall be administered in conformity with the agreement and the prudent man’s rule

Answer 11

Prudent administration

Question 12

interest of the client shall be placed above the bank

Answer 12

Undivided loyalty and utmost care

Question 13

Practices shall be carried out in accordance with the _________________ and _____________________ prescribed by _____________

Answer 13

basic standards; risk management guidelines; regulations

Question 14

The Trust Officers of the Philippines has a Code of Conduct and Ethics which was adopted last _________.

Answer 14

May 1997

Question 15

The primary aim is for the trust officers to ______________________________________________________________ in the performance of their trust and other fiduciary responsibilities.

Answer 15

conform to the highest standards of integrity and prudence

Question 16

any officer or non-officer of the trust department who exercises discretion and judgement. 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

Answer 16

Trust Officer

Question 17

shall refer to what is fair, proper, just, moderate and suitable under the circumstances.

Answer 17

Reasonable

Question 18

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.

Answer 18

Self-Dealing

Question 19

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

Answer 19

Prudent Man’s Rule

Question 20

transaction under which unrelated parties, each acting in his/her best interest, would carry out a particular transaction

Answer 20

Arm’s length transaction

Question 21

The TOAP Code of Conduct Covers the Following Relationships:

Answer 21

1. The Trust Officer and Society
2. The Trust Officer and the Client
3. The Trust Officer and Government and its Agencies
4. The Trust Officer and the Members of the Trust and Fund Management Profession
5. The Trust Officer and the Member Institution

Question 22

Trust Officer and Society

• Social dimension to financial business by delivering trust and fund management services _____________ to the public good, with loyalty consistent with _______________________.
• Creation and promotion of ______________ 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
• Treat __________________ equitably.
• Stresses __________________________
• Refuse on __________________ to accept any business that could impair the _________________ of the institution and the Association.
• Accept and retain accounts where trust and other fiduciary services can be rendered to the _________________________ of all parties, provided that the proposed account and its objective/s is humane and conforms with all legal and regulatory requirements.
• Trust Officer shall charge fees that are ___________________________________ or within the range as prescribed and/ or authorized by management, based on:

Answer 22

• NOT prejudicial; what is moral, just and legal
• public awareness
• all accounts and/or clients
• mutual benefit & satisfaction
• moral or legal grounds; good reputation
• mutual benefit and satisfaction
• commensurate to the services rendered
a. Time spent
b. Extent of business relationship
c. Personnel required
d. Degree of difficulty and performance in handling the account
e. Responsibilities and risks inherent in the account
f. Nature of the fund, giving appropriate consideration where the fund is for benevolent or charitable purposes.

Question 23

Trust Officer and Client

• Welfare and interest of the client is ___________, characterized by ________________________.

• Trust Officer shall observe ____________ to clients, ________ for all accounts
→ ______________________ primarily for the interest and benefit of the client and latter’s beneficiary/ies
→ By ___________ with all accounts
→ By ________________ (self-dealing and self-servicing transactions)

• ______________________________________________________ as well as any information acquired in the course of handling the latter’s account except when required or requested by competent authorities.

• ________________________________________. He/she shall:
→ Submit a comprehensive report of ___________________________ as required by the existing regulations.
→ Allow the client ______________________________________ pertaining to his/her account during office hours.

Answer 23

• paramount; care, good faith, arms- length transactions

• utmost fidelity; fair deal
→ Administering the accounts
→ dealing fairly
→ avoiding conflicts of interests

• Keep complete confidentiality of the records of the client

• Keep proper accounting and reporting on client’s investments
→ fund and investment performance
→ full and complete access to all records

Question 24

Trust Officer and Client

• Institute appropriate __________ for the ________________ of each fiduciary record/ account. In this regard, the Trust Officer shall:
→ Keep the ___________________________________________________________________ from the books and records of other business.
→ Ensure that trust books and records contain ___________________________________.
→ Keep all monies, properties or securities received by the institution in its capacity as ___________________________ physically separate and distinct from assets of other business.

• Trust Officer shall make ____________________________ of all relevant information and details on the latter’s

Answer 24

• controls; administration and security
→ trust books and records of each fiduciary account separate and distinct
→ full information relative to each fiduciary account
→ trustee, fiduciary or fund manager

• full disclosure to the client

Question 25

**Trust Officer and Client** • Investments and seek _______________ for all transactions requiring ____________. • In accounts where the Trust Officer exercises full discretion, Trust Officer shall: • Trust Officer shall establish a ______________________ of the client’s guidelines account _______________ such as, but not limited to ________________________________________________________. • Comply with the _____________________ of the agreement or documents governing the trust and other fiduciary accounts in a manner consistent with the __________________________________________. • Refrain from engaging in any transaction which may actually or potentially give rise to a _____________ or which may _______________________ of the client. • Trust Officer shall at all times transact its business __________________, on an ______________.

Answer 25

• written approval; prior consent • → Safety of principal is primary, income only secondary → Clear understanding of client guidelines, objectives, restrictions → Comply with all terms and conditions → Conduct business at arms length basis • clear and mutual understanding; restrictions and objectives; capital preservation, liquidity, growth, investment return optimization and risk management • terms and conditions; applicable laws, rules and regulations and this Code • conflict of interest; unduly compromise the interest • in behalf of his/her clients; arm’s length basis

Question 26

**Trust Officer and Government and its Agencies** • Trust Officer shall cooperate with the __________________________ on matters relative to trust and fiduciary business, and show _______________ without violating the ___________________ of his/her clients. • Trust Officer shall keep abreast of developments in ___________________________ including but not limited to _______________________________________________, competitive industries and developments affecting the ____________________ industry. • Trust Officer shall ensure ___________________ with said regulations and procedures

Answer 26

• government and its agencies; respect and fairness; confidence and trust • relevant laws and regulations; securities, taxes, banking and financing; trust fund management • continuing compliance

Question 27

**Trust Officer and Government and its Agencies** • Trust Officer shall cooperate with the __________________________ on matters relative to trust and fiduciary business, and show _______________ without violating the ___________________ of his/her clients. • Trust Officer shall keep abreast of developments in ___________________________ including but not limited to _______________________________________________, competitive industries and developments affecting the ____________________ industry. • Trust Officer shall ensure ___________________ with said regulations and procedures

Answer 27

• government and its agencies; respect and fairness; confidence and trust • relevant laws and regulations; securities, taxes, banking and financing; trust fund management • continuing compliance

Question 28

**Trust Officer and the Members of the Trust and Fund Management Profession** • Uphold the integrity and dignity of the ___________________________________, • Support activities that shall promote the _________________________________________ • Observe mutual ________________________________________________________________________________ with other members of the trust and fund management profession. • Maintain healthy competition with ______________ of other financial institutions by refraining from practices such as ____________________________________________________________________________________. • Trust Officer shall have the ________________ to ensure that all advertising and promotional materials contain clear, factual, and all full disclosure of the institution’s products and services, so as not to _________ clients.

Answer 28

• trust and fund management profession • professional development of TOAP members • respect, courtesy, cooperation, friendship and professionalism • trust officers; misrepresentation of material facts, negative criticism or derogatory remarks against competing institutions • moral obligation; mislead

Question 29

**Trust Officer and the Member Institution** • Trust Officer shall observe ________ towards his/her institution. • Trust Officer shall implement the ______________________________ of the institution he works for. Provided, such decisions are _____________ to the existing regulations as well as to this Code. • All transactions with the institution made in behalf of his/her clients shall be ___________________________________ in order to uphold the independence of the trust and to primarily serve the best interest of the client. • Trust Officer in coordination with the member institution shall establish and enforce strict compliance with ____________________________. ______________________ 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.

Answer 29

• loyalty • decisions of the Trust Committee; NOT contrary • carried out on an arm’s length and best effort basis • internal policies relating to interests; Utmost propriety

Question 30

**Trust Officer and the Member Institution** • Trust Officer in coordination with the member institution shall observances of the __________________________________. • Trust Officer in coordination with the member institution shall keep a breast of the _____________________ needed for them to perform their duties and responsibilities to clients. • Trust Officer, in coordination with the member institution, shall ensure adherence with __________________, this Code and the rules and regulations of TOAP. • Trust Officer shall inform his/her ___________________ or through his/her _________________ that he/she is obligated to comply with this Code and is subject to ___________________________.

Answer 30

• highest standards of integrity and honesty • development of skills • existing regulations • institution directly; immediate supervisor; disciplinary sanctions for violations

Question 31

Sanctions

Answer 31

• Procedures prescribed by TOAP Board & Ratified by Members Quorum • Admonished; Suspended (for1month); Expelled (by2/3votemembers)

Question 32

Amendment & Modification

Answer 32

• Requirement: 3⁄4 vote of membership

Question 33

When a Trust Entity enters into any investment deal or service with its parent bank, its subsidiaries, and affiliates it must ensure that conflicts of interest are avoided by establishing and maintaining adequate _______________ between them.

Answer 33

“Chinese Wall”

Question 34

is an effective system of functional barriers between Trust Entity and the Bank and its related companies.

Answer 34

“Chinese Wall”

Question 35

Chinese wall shall consist of:

Answer 35

 Having separate policies and procedures on credit and investments for the Trust Entity  Clear delineation of duties and responsibilities pertaining to a deal or transaction

Question 36

**Chinese Wall** • All deals undertaken by any Trust Entity with its parent bank or its related companies must be in the ordinary course of business, ____________________ and in accordance with the ______________________.

Answer 36

• done at arm’s length; best trading practices

Question 37

**Best Execution** In conducting business activities, traders, portfolio managers, and fund managers shall:

Answer 37

1. Act in the best interest of the clients 2. Take all reasonable steps to execute client orders promptly and on the best available terms under prevailing market conditions 3. When selecting a broker to execute a trade, consider the full range of broker’s services 4. In relation to discretionary accounts and pooled funds, exert reasonable effort to ensure that the quotes/fees of the related counterparties are competitive 5. Document all communication with counterparties or brokers, including the bid/offer prices, to maintain audit trail

Question 38

**Personal Investment Policy**  All employees are required to _________________________________  All trust officers shall adhere to the ________________________________, bearing in mind that the interest of clients must always be placed ______  When in doubt, all Covered Persons should consult the ______________________________ prior to ______________ to effect trade of any security, to prevent any ___________ of this Policy.

Answer 38

 disclose their personal investment portfolios  best trading and investment practices; first  Office of the Compliance Officer; seeking approval; violation

Question 39

Consumer Protection

Answer 39

→ Complaint (Simple and Complex Complains) → Request → Inquiry

Question 40

An expression if dissatisfaction relative to a financial product or service in which a response or resolution is expected.

Answer 40

Complaint

Question 41

where front line staff solution or immediate explanation/action can be rendered. A resolution is immediate if it can be resolved without the need of a third party intervention

Answer 41

Simple Complains

Question 42

complaints which need further assessment, verification or investigation with third party intervention

Answer 42

Complex Complains

Question 43

An act politely or formally seeking for an action to be rendered relative to a financial product or service

Answer 43

Request

Question 44

An act seeking confirmation relative to a financial product or service

Answer 44

Inquiry

Question 45

Consumer Assistance Program

Answer 45

→ Capability Building → Customer Assistance Process → Complaints Recording and Data Management → Risk Assessment Strategies → Complaints Reporting → Evaluation of the CAP

Question 46

Provide continuing education to all personnel on consumer protection laws, rules and regulations as well as related policies and procedures.

Answer 46

Capability Building

Question 47

to safeguard the interest of and nurture its relationship with its existing and potential customers.

Answer 47

Customer Assistance Process

Question 48

to safeguard the interest of and nurture its relationship with its existing and potential customers.

Answer 48

Customer Assistance Process

Question 49

Maintain a consolidated master register of all feedback/complaints received by the trust institution

Answer 49

Complaints Recording and Data Management

Question 50

Identify and analyze any recurring or systematic problem and any weakness in the internal control procedure or process

Answer 50

Risk Assessment Strategies

Question 51

submit a complaints report to the Bank’s Client Experience Center and to the Board

Answer 51

Complaints Reporting

Question 52

assess the performance of the personnel/business units assigned to manage/handle received complaints.

Answer 52

Evaluation of the CAP