The Securities and Exchange Commission of Pakistan (SECP) has approved amendments to the Modaraba Regulations, 2021. The amendments have refined the regulatory framework for Modarabas in Pakistan while improving doing business climate in the country.
The amendments, approved after the required public consultation, have been notified through publication in the official gazette vide SRO No. S.R.O. 1547 (I)/2022.
The amendments have created transitional provisions for Modarabas to comply with the minimum equity requirement; increased the per party house finance limit; allowed Modarabas to engage in real-estate business; simplified requirements for reserve funds following the withdrawal of tax incentives; aligned the time period for filling casual vacancies with the Companies Act, 2017; and created an enabling provision to impose penalties for violations of provisions of the Modaraba Regulations, 2021.
In addition, after thorough internal and external deliberation, a circular for real estate investments has also been notified vide S.R.O. 1546 (I)/2022, setting the conditions for the Modarabas to invest in real estate projects.
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