On May 21, it formally launched the guidelines on Securing & Expanding Capital in Real Estate Investment Transactions or SEC RENT, which streamlined the registration of securities by companies engaged in rental pool arrangements.
Through the SEC RENT, a program governed by an SEC memorandum issued on July 16, 2024, the Commission aims to boost fundraising options for these developers.
Under the rental pool scheme, units in projects like condominiums, hotels, or resorts are sold to buyers who then place them in a rental pool. The developer or a third-party manager operates the pool, and profits are shared among contributors based on agreed terms.
Highlighting the sector’s economic importance, SEC Commissioner McJill Bryant T. Fernandez noted that real estate accounted for 5.6 percent of the country’s GDP in 2024 and is closely linked with construction, finance, retail, and tourism.
"Given its scale and strategic importance, the real estate sector stands to benefit immensely from deeper participation in the capital market," Fernandez said.
The SEC RENT framework expedites the review process for registration statements, requiring the Markets and Securities Regulation Department (MSRD) to complete evaluations within 45 days of submission. Before filing with MSRD, companies must first secure pre-evaluation clearance from other SEC divisions, including the Company Registration and Monitoring Department (CRMD), Corporate Governance and Finance Department (CGFD), Office of the General Counsel, Enforcement and Investor Protection Department, and Office of the General Accountant (OGA).
Once clearance is secured, the company submits the SEC RENT Checklist Form, SEC RENT Form, prospectus, and other documents for MSRD processing and review.
The launch was held in partnership with the Chamber of Real Estate & Builders’ Association, Inc. (CREBA), whose 4,000-strong membership of developers, individuals, and firms are seen as potential beneficiaries of the program.
For many small developers, the initiative signals a shift. “We always thought the capital market was just for big players,” said Demetrio L. Posadas, CREBA vice president for housing affairs. “But thanks to the SEC’s efforts, small companies like ours now see a path to access funding beyond traditional borrowing.” —Ed: Corrie S. Narisma
