The Securities and Exchange Commission of Pakistan (SECP) has allowed subsidiary of the ISE Towers-Real Estate Investment Trust (REIT) Management Company Limited to apply for the registration to act as a trustee of "open end scheme" or "closed end scheme".
According to a circular issued by the SECP here on Friday, the SECP has issued eligibility criteria to work as trustee of Collective Investment Schemes. An expert said that a Collective Investment Scheme (i.e. a mutual fund) was an investment vehicle comprising a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, commodities, money market instruments, securities, treasury bills and other capital markets instruments.
The "closed end scheme" is a scheme where an Investment adviser with the permission of the SECP arranges with a trustee to launch a closed-end trust and collect funds from individual investors through the issuance of units.
However, the units of an open end scheme are regularly issued by and redeemed back to the fund thereby its capital continuously fluctuates, the expert added.
The ISE Towers REIT Management Company Limited would work as trustee of open end scheme or closed end scheme after fulfillment of the following laid down conditions:
Firstly, the company shall be a public limited company with principal line of business/primary object clause of providing trustee services to Collective Investment Scheme (CIS), the REIT Schemes and private funds under the NBFC Regulations, Private Funds Regulations 2015, and the Real Estate Investment Trust Regulations, 2015.
Secondly, the company shall initially have an equity of Rs 100 million, to be increased thereafter to Rs 200 million in five years and during this five year period the company shall at all times ensure that its equity is at least 0.10 percent of the net assets maintained under its trusteeship.
The SECP may direct the company to fulfill additional capital requirements and the company shall be bound to comply with such direction.
The sponsors of the company shall make best efforts for inclusion of licensed commercial bank/DFI as major shareholder.
The Board of Directors and major shareholders of the company shall be subject to prior SECP approval and shall comply with the Fit and Proper Criteria as per Schedule IX of the Non-Banking Finance Companies (NBFCs) Regulations 2008. The SECP shall be empowered to remove any or all of the directors on the board of the company in the interest of the investors or capital market.