THE Securities and Exchange Commission (SEC) has set a Sept. 30 deadline for real estate developers and companies engaged in rental pool agreements to complete the registration of their securities.
In a notice dated Sept. 8, the corporate regulator reminded firms to comply with the requirements under SEC Memorandum Circular No. 12, Series of 2024, or the Securing and Expanding Capital in Real Estate Non-Traditional Securities (SEC RENT).
The rules, issued in July, aim to streamline capital raising for developers offering investment returns through rental properties.
Rental pool agreements are investment contracts in which a developer sells or offers units in projects such as condominiums, hotels, resorts, or dormitories, with the condition that these units are placed in a rental pool managed by the developer or a third-party operator.
Under SEC RENT, the developer or manager must secure approvals from the SEC’s Company Registration and Monitoring Department, Corporate Governance and Finance Department, Enforcement and Investor Protection Department, Office of the General Counsel, and Office of the General Accountant before filing its registration statement with the Markets and Securities Regulation Department (MSRD).
After pre-filing, the company submits the required documents to the MSRD for pre-processing. Once accepted and fees are paid, a 45-day review begins.
If the commission approves and all requirements are met, the MSRD will issue the registration order and permit to sell securities.
The SEC said the regulation simplifies and expedites the registration and review process, allowing real estate companies — including small developers — better access to capital markets for funding growth through these investment schemes.
“All corporations whose operations or business model fall under the coverage of SEC RENT are hereby advised and reminded that they have less than a month within which to comply with the memorandum circular and have their pertinent securities registered,” the commission said in its notice.
The regulator warned that companies failing to meet the deadline will face penalties and possible enforcement actions. — Alexandria Grace C. Magno
