Securities and Exchange Commission of Pakistan (SECP)s recent endeavours on the regulatory front deserve applause. The regulator seems to be on the go to tone up the NBFC sector in particular. Case in point here is the consultative mechanism adopted by the SECP for amendments in Real Estate Investment Trusts (REITs) regulations.
Just recently, SECP held talks with industry stakeholders in order to take into account their comments on the draft REIT regulations. To recall, REIT is an area that has largely remained undiscovered and unmapped in Pakistan. While this is mainly because a large part of countrys real estate sector remains undocumented and unmapped, hence falling short of demonstrating transparency, the stringent REIT regulations are also to be blamed.
However, the good thing is that now the regulator seems to have realized the need to slightly loosen up the regulations while also securing investors interests. While the finalized amendments in the regulations are not yet on hand, salient features of the modified framework include: easing of capital requirements for REIT schemes and the REIT Management Company (RMC), simplification of authorization procedures, performance incentives for fund managers and facilitating avenues for accessing capital.
Referring to SECPs press release in this regard, concerns and recommendations of industry stakeholders and the NBFC reform committee have been given due consideration. Besides, the REIT regulations of some other Asian economies were also studied.
Industry stakeholders are optimistic and SECPs efforts are being well-recognized by the industry. As Naseem Beg, the Chairman of Arif Habib REIT Management said, "SECP is working with a positive mind; it has a clear understanding of the industry and the regulatory framework. Stakeholders concerns and issues are also being considered and we are hopeful the regulations will be streamlined soon."
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