The REITs Pension and Private Equity Wing is responsible for licensing, registration and regulation of: (1) REIT Management Companies and REIT Schemes and (2) registration and regulation of pension fund managers and private pension schemes and (3) Private Equity and Venture Capital Fund Management Companies and Private Equity and Venture Capital Funds in Pakistan including the entities previously licenced as venture capital companies.

REITs is an alternative asset class which will add depth to the capital market and provide transparency to the real estate sector in the form of comprehensive disclosures and accountability through a trust mechanism engrained in the REIT Regulations. REITs will provide an additional product choice to retail investors and added flexibility to investment managers.

Information related to REITs is available at following links:

1. RMC Formation Guidelines
2. RMC and REIT Scheme process flow diagram
3. REITs Regulations 2008
4. Amendments in REITs Regulations 2008
5. Amendments in REITs Regulations, 2008

Private Equity is also an alternative asset class and the SECP has promulgated a Regulatory Framework for the Private Equity and Venture Capital Funds in Pakistan. The Regulations have been developed in light of the international practices and recommendations by the participants of both local and international financial markets. The PE&VC Fund is an unlisted closed-end trust open only to high net-worth individuals and institutions due to its intrinsic nature of being a high-risk asset class. The PE&VC Fund aims to provide equity for seed/start-up capital, expansion and buy-out financing primarily to private companies.

Information related to PE&VC Funds is available at following links:

• PE and VC Formation Guidelines
• The Private Equity & Venture Capital Fund Regulations, 2008

The private pension funds are regulated through Voluntary Pension System Rules, 2005. The Voluntary Pension System provides a comprehensive framework for the employed and self-employed individuals to contribute into the pension funds. Pakistani nationals holding National Tax Number (NTN) or Computerized National Identity Card (CNIC) or National Identity Card for Overseas Pakistanis (NICOP) can become participants of a pension fund and avail tax credit as specified in the tax laws. Individuals contributing to the pension fund have the flexibility to choose between various investment options as well as between various fund managers.

Modaraba is one of the prime modes of Islamic Financial System. In Pakistan the process of Islamization of the economy was initiated in 1980 when the Government introduced the concept of Modaraba for Islamization of the economy in the banking and corporate sector by promulgating the Modaraba Companies & Modaraba (Floatation & Control) Ordinance, 1980 and Modaraba Companies and Modarabas Rues 1981. Amongst other activities, the law provides that a Modaraba can undertake Ijara, Morabaha, Musharaka financing activities, trading of Halal Commodities, project financing activities, investment in the stock market and can act as a special purpose vehicle and a venture capital company.

The Modaraba Wing is responsible for the registration, authorization, regulation and enforcement of regulatory provisions pertaining to Modaraba Management Companies and Modarabas. All the products and business activities of the Modaraba are approved by the Religious Board* with the facilitation of the Modaraba Wing. For further information regarding Registration and formation of a Modaraba Company and Modaraba, click here.

* The Religious Board
The Religious Board comprises of a Chairman and two Shariah Scholars appointed by the Federal Government. The following is the composition of the Religious Board constituted by the Federal Government  vide notification dated August 30, 2012:

• Former Justice Syed Zahid Husain Bokhari (Chairman) ;
• Mufti Muhammad Saeed Khan (Shariah Scholar); and
• Dr. Muhammad Tahir Mansoori (Shariah Scholar).

The Religious Board has approved the ‘Twelve Model Islamic Financing Agreements’, click below to preview the Agreements:

• Diminishing Musharaka DM-Immovable property financing agreement
• DM-Joint Sharing Agreement
• DM-Musharakah Agreement
• DM-Rental Agreement
• Undertaking to pruchase MU upon termination
• Undertaking to purchae MU during the term of DM
• Ijarah
• Istisna
• Mudarabah
• Musawamah
• Musharaka
• Murabahah
• Salam
• Syndicate Mudarabah
• Syndicate Musharakah
• Syndicate Musharaka
• Investment Agency Agreement
• Islamic CFS Murabahah
• Sukuk

On Site Inspection wing is responsible for centralized on-site inspection of the entities licensed and regulated by SCD. Inspection wing conducts full scope inspections of the entities on regular basis according to the inspection plan chalked out for the entities regulated by the Division.  

Off-site surveillance wing is responsible for centralized off-site surveillance of the entities licensed and regulated by SCD. To effectively discharge its functions, the wing has prescribed monthly on-line returns for regular submission by NBFCs/Modarabas to the Commission. Off-site surveillance is also carried out on the basis of annual, half yearly and quarterly accounts.

Enforcement wing is responsible for the centralized enforcement function of NBFCs and has become part of Supervision Department after recent re-organization of Specialized Companies Division.