A section of the press has carried a statement of the Association of Builders and Developers (ABAD) about the SECP's role proposed in the draft Companies Bill for regulating the real estate sector. The statement is completely misplaced. The SECP does not in any manner intends to regulate the business of real estate per se, but its focus is to ensure that the companies registered with the SECP having real estate as their principal line of business, operate under certain rules and regulations in order that they gain confidence of the public.
The SECP would like to clarify that the provision relating to companies' real estate projects in the draft Companies Bill, 2016, is restricted to the companies which run real estate as their principal business after obtaining the necessary NOC from the relevant local authorities.
The intent and purpose of the entire scheme is to provide increased investor confidence in the real estate schemes launched by the companies by providing complete mechanism for maintaining proper accounts and approval of the authorities. It is conceived that the prospective investor will be encouraged to invest in real estate project initiated by a company which has transparent financial record. The purpose of the proposed Bill is mainly to ensure clean business activity by the company in the real estate sector, so that investor interests are protected and they do not suffer in any way.-PR
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