ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Monday published a concept paper titled “Review of Landscape & Revamping Framework-REITs” for soliciting public comments.
It provides a glance at Real Estate Investment Trusts (REITs) Industry and covers proposed amendment(s) in the REITs regulatory framework.
The aim of proposed regulatory amendments is to introduce new REIT products, create ease for REIT Management Companies in launching different REIT schemes, and shift towards reporting based regime.
REITs structure is new to Pakistan’s market but in past two years, ten (10) new REIT schemes have been launched in the country which showed huge potential for growth. National strategic projects having social and economic benefits can also be financed and executed through REITs structure.
The SECP has introduced certain regulatory reforms relating to REIT(s) function over the last couple of years. Subject reforms have led to increase in number of REIT Management Companies and registered REIT schemes. However, REIT area is new to our market and there is a huge potential for growth.
Under the existing regime, At least 7 different approvals are required, making REITs less competitive; the universe of the REIT Assets and infrastructure is limited and the regulatory overburden in terms of segmented reporting and approvals leading to no value addition.
The purpose of proposed regulatory amendments is to introduce new REIT products, create ease for RMCs in launching different REIT schemes and shift towards reporting based regime.
It is advised that the RMC shall practice due diligence in preparing Trust Deed as per the standard format and evaluate applicability of each clause in context of respective REIT scheme and shall add/omit/rephrase any clause(s) (as applicable) with respective to each REIT Scheme in accordance with the REIT Regulations, 2015 and other applicable laws, it added.
The concept paper, drafted after due consultation with stakeholders, can be accessed from SECP’s website at https://www.secp.gov.pk/document/review-of-land-scape-revamping-framework-real-estate-investment-trusts-reits/wpdmdl=45436&refresh=62ff93e4c28181660916708. Comments on proposed amendments in regulatory framework can be shared by September 2, 2022 at reitsfeedback@secp.gov.pk.
Copyright Business Recorder, 2022