April 21, 2021
SECP to reform regulatory framework for REITs

SECP to reform regulatory framework for REITS

Islamabad: Chairman of the Securities and Exchange Commission of Pakistan (SECP), Aamir Khan, has reaffirmed the resolve to reforming Pakistan’s Real Estate Investment Trusts (REITs) regulatory system.

The aim of the initiative was to move toward disclosure-based issuance, provide the necessary support for the growth of Real Estate Investment Trust (REIT) schemes, lower entry barriers, and draw PPP-based infrastructure projects to the REIT zone. Khan made his comments at a roundtable discussion on proposed changes to the REIT Regulations 2015.

On the occasion, a departmental presentation detailed the main changes proposed, including revamping the traditional REIT model, encouraging REITs to invest directly in real estate or through acquisitions in special-purpose firms, adding the idea of public-private partnership (PPP)-based capital ventures under the REIT umbrella, and more.

In addition, the regulatory changes make it easier for REITs by eliminating a variety of approval procedures and simplifying the conditions for submitting different papers. The presentation was accompanied by a lively debate that discussed the whole scope of REITs, as well as their regulatory and organizational structure.

Commissioner of the Specialised Companies Division Farrukh Sabzwari stated that the draft reforms were presented after an eight-month stakeholder consultation process. For both the traditional and infrastructure REIT models, the proposed amendments incorporate the plurality of recommendations made by stakeholders during the prior consultation process.

However, the SECP is open to any further feedback/improvements, which is why stakeholders can submit their comments during this final consultation round so that the rules can be considered and finalized as soon as possible.

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