SECP Proposes Amendments to REIT Regulations

The Securities and Exchange Commission of Pakistan (SECP) has issued notification for public consultations on the proposed amendments to the Real Estate Investment Trust (REIT) Regulations, 2022.   The draft amendments follow an extensive consultation process with key stakeholders, including REIT Management Companies (RMCs), trustees, the banking sector, mutual funds, legal firms, and consultants. Initial feedback was collected to pinpoint areas for improvement in the REIT Regulations.   The insights were consolidated into a detailed Consultation Paper titled “Areas of Improvement in the REIT Regulations, 2022”, which was published to invite further feedback. In-person consultations were subsequently held in Karachi and Lahore, where the feedback was discussed in-depth, ensuring the proposals were refined based on a consensus-driven approach.   The SECP has now notified the draft amendments for comments before these become effective. These amendments focus on streamlining procedures for registration of trust deed and REIT Scheme; establishing clearer timelines for transferring real estate/shares of Special Purpose Vehicles (SPVs) under the REIT scheme, and promoting early listing of REIT schemes to boost their presence as a capital market asset class.   Additionally, the amendments aim to strengthen the roles and responsibilities of the RMC and trustee, address regulatory arbitrage across different REIT structures, and enhance adherence to the Shariah governance framework.