The Securities and Exchange Commission (SEC) expects more real estate companies to turn to the capital market for funding following streamlined rules for securities registration involving rental pool arrangements.
The SEC introduced the guidelines under the Securing & Expanding Capital in Real Estate Investment Transactions (SEC RENT) framework.
Released through SEC Memorandum Circular No. 12, Series of 2024, SEC RENT simplifies the registration process for real estate firms offering investment contracts through rental pool agreements. These involve developers selling units in condominiums, hotels, or resorts, with buyers contributing the units to a managed rental pool and receiving a share of rental income.
“Accounting for 5.6 percent of GDP in 2024, the real estate industry continues to be a vital engine of economic development, with strong interconnections to construction, finance, retail, and tourism,” SEC Commissioner McJill Bryant T. Fernandez said Thursday.
“Given its scale and strategic importance, the real estate sector stands to benefit immensely from deeper participation in the capital market,” he added.
Under SEC RENT, the SEC’s Markets and Securities Regulation Department (MSRD) is required to review registration statements within 45 days of filing, in line with the Securities Regulation Code.
Before reaching the MSRD, companies must first secure pre-evaluation clearance from key SEC departments, including Company Registration and Monitoring, Corporate Governance and Finance, and the Office of the General Accountant.
The application must include the SEC RENT checklist, forms, prospectus, and other required documents.