Investment firms can now consolidate multiple strategies under a single structure to cut administrative costs for fund managers and make it easier for investors to diversify across assets.

The Securities and Exchange Commission (SEC) said Wednesday it issued rules allowing the creation of “umbrella funds,” enabling firms to house several sub-funds—such as equity and fixed-income portfolios—within one investment company.

Citing an SEC Memorandum Circular No. 14, series of 2026 issued 8 April, the SEC said it laid out the registration, operation, and reporting framework for open-end investment companies structured as umbrella funds and their sub-funds.

“These new rules provide the public with clear guidance on the registration and reportorial requirements of these funds, as part of our commitment to enhance operational adaptability and streamline administrative processes of funds and fund managers, while expanding the range of investment opportunities in the capital market,” SEC Chairperson Francis Lim said.

An umbrella fund is defined as a registered open-end investment company that holds two or more sub-funds—such as equity or fixed-income funds—with separate assets and liabilities.

Each sub-fund operates independently, meaning losses are confined to the specific sub-fund where the investor is invested—an added layer of protection.

Investors can also switch between sub-funds within the same umbrella fund, subject to disclosed fees and conditions, allowing them to adjust strategies without moving to a different provider.

To adopt the structure, eligible firms must include “Unitized Umbrella Fund” in their name and maintain at least P100 million in paid-up capital.

They must secure a secondary license from the SEC and obtain approval of a registration statement before offering securities, in line with the Securities Regulation Code.

Existing investment companies may convert into umbrella funds with approval from shareholders holding at least a majority of outstanding capital stock.

Fund managers must comply with reporting requirements under multiple laws, including the Securities Regulation Code, Revised Corporation Code, Investment Company Act, and corporate governance rules.

They are also required to submit monthly sales and redemption reports and provide financial statements for both the umbrella fund and each sub-fund.

Separate quarterly and annual financial statements must be filed for each sub-fund, while consolidated statements are allowed if disclosures clearly break down each sub-fund’s financial position.

Annual reports must be audited by an SEC-accredited independent auditor.

“By allowing single investment firms to pursue other investment objectives and strategies through the creation of sub-funds, registration and monitoring of the umbrella fund and accompanying sub-funds will be more efficient while also providing investors with the opportunity to conveniently diversify their portfolio,” Lim said.