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ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) Chairman Aamir Khan has said that the size of the Real Estate Investment Trusts (REITs) has reached Rs98.344 billion during 2021-22 marking a growth of 81 percent over the previous fiscal year’s figure.

Sharing SECP performance during 2021-22, Chairman SECP informed media that in order to increase investment in the real estate sector, a framework for PPP Real Estate Investment Trusts (REITs) was introduced that reaped benefits as the fund size of REITs reached Rs. 98.344 billion marking a growth of 81 percent over the previous year’s figure.

The launch of the EMLAAK platform, as the country’s first digital distribution and aggregator platform, is a major stride towards facilitating investors in making informed decisions.

Likewise, on the lending side, owing to revamp of NBFC Regulations, digitally enabled lending platforms have disbursed over 33 billion of nano loans to more than 2.5 million individual borrowers while first buy now pay later (BNPL) NBFC was licensed, that disbursed Rs. 778 million to 45,166 borrowers.

The SECP Chairman stated that the market development initiatives set for upcoming year include revamping of REITs Regulatory framework by enhancing universe of REIT assets, creating ease for REIT Management Companies and shifting towards disclosure-based regime. Moreover, SECP foresees establishment of SRO of mutual fund industry to promote best practices, investor education and effective complaint redressal.

We will also continue to amend and update the existing laws and regulations, introduce regulatory interventions that enhance incorporation, support startups and encourage innovation. In terms of strengthening enforcement in forthcoming year, risk-based supervision approach will be adopted across the regulated sectors duly supported with robust adjudication and strong in-house litigation functions. The three main Acts – SECP Act, NBFC Act, Securities and Futures Act – are already under an overhaul process, in consultation with our stakeholders.

REITs: SECP for revamping regulatory framework

He said that the major thrust for the SECP was focusing on improving its internal workflow and decision making process to ensure robust enforcement. This was achieved by repositioning itself from a sector-based to a function-based regulatory body.

Building on the initiatives of establishing a dedicated supervision division and a dedicated adjudication division, backed by a strong litigation capacity, meaningful progress was witnessed in this space. 579 cases were concluded through orders imposing penalty amounting to Rs. 77 million on listed companies and licenced entities on account of violation of relevant laws inclusive of AML law.

Likewise, 85,519 orders were issued to unlisted companies imposing penalties amounting to Rs. 4,701 million. Internal transparency and accountability were ensured by streamlining the SOPs and processes related to regulatory enforcement activity resulting in effective in-house litigation management in over 90 percent cases. Building on the functional based operations, consolidated licensing activity under a centralised department was also approved, and it started functioning, effective from June 2022.

Chairman SECP added that an important area of reform related to reducing entry barriers and promoting competition, required simplifying the regulatory requirements, removing redundancies, and enhancing measures for ease of doing business 6 while simultaneously improving the user experience.

The fact that out of a total of 172,234 registered companies till June 30, 2022, 40 percent of companies were incorporated in the last three years, and 30 percent in the last two years, is a testimony to the effectiveness of this approach.

Digital incorporation certificates, digital portal for opening corporate bank accounts and digital combined certificate with provincial departments are key interventions that have given impetus to promoting incorporation. End-to-end digitalization of company incorporation process ensured that during the year, 99 percent of the new companies were registered online and around 23 percent of companies were registered on the same day.

A modern and efficient Business Centre was operationalised at the Head Office for direct facilitation to businesses. More than 17,000 queries were responded to through the SECP’s live WhatsApp service.

Similarly, facilitating listing of small enterprises, startups and Greenfield companies, through GEM board at stock exchange, enabled listing of three growth companies raising Rs1.118 billion.

Copyright Business Recorder, 2022

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