Amendments to the Requirements of a REIT Property Manager under Rule 6 of the IRR of R.A. No. 9856

June 14, 2019 SEC MSRD NOTICE The Commission hereby requests all interested parties to comment on the attached AMENDMENTS OF THE QUALIFICATION REQUIREMENTS OF A REIT FUND MANAGER UNDER RULE 6 OF THE IMPLEMENTING RULES AND REGULATIONS OF R.A. NO. 9856 OR THE REAL ESTATE INVESTMENT TRUST (REIT) . Kindly address your comments to the Markets and Securities Regulation Department (MSRD) , Ground Floor Secretariat Building, PICC Complex, Roxas Boulevard, Pasay City, c/o Atty. Glory Grace Arugay not later than 12nn 1 July 2019 . You may also email your comments to [emailprotected] , [emailprotected] , [emailprotected] and [emailprotected] . Issued on June 14, 2019. ATTACHMENT SEC MEMORANDUM CIRCULAR NO. ___ Series of 2019 SUBJECT : AMENDMENTS TO THE QUALIFICATION REQUIREMENTS OF A REIT FUND MANAGER UNDER RULE 6 OF THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9856 OR THE REAL ESTATE INVESTMENT TRUST RULE 6 FUND MANAGER SEC. 1. Fund Manager . A REIT shall appoint a Fund Manager who shall be independent of the REIT, its promoter/s or sponsor/s. To ensure independence of the fund manager from the REIT, the following shall be complied with : CAIHTE 1. Majority of the members of the board of the REIT Fund manager must be independent directors with working knowledge of the real estate industry . 2. The directors (including the independent directors) of the REIT and its Sponsors/Promoters cannot occupy more than 49% of the board of directors of the fund manager . aScITE 3. A Related Party Transactions Committee shall be constituted with the task of reviewing related party transactions. Majority of its members must be independent directors who shall vote unanimously in approving such related party transactions . For related party transactions, the Rules prescribed under MC No. 10, series of 2019 shall likewise be complied with . SEC. 2. Organization and Requirements . 2.1 An entity may only engage in the business of a REIT Fund Manager once it has obtained the necessary license to act as such, in accordance with the rules and regulations of the Commission. 2.2 A REIT Fund Manager can either be a registered domestic corporation, a trust entity with an existing BSP license, or a foreign corporation duly licensed to do business in the Philippines, subject to the following minimum requirements: (i) duly licensed under these Rules to engage in the business of fund management for REIT . If the Fund Manager is a trust entity, it shall be covered by existing BSP rules and regulations governing trust entities and regulations which the BSP may from time to time issue; (ii) in case of a foreign corporation , with at least three (3)-year track record in the area of fund management, corporate finance, other relevant finance-related functions, property management in the real estate industry or in the development of real estate industry ; (iii) with a minimum paid-up capital of Ten Million Pesos (Php10,000,000.00) if a domestic corporation. In case of a foreign corporation, it must have a minimum paid-up or assigned capital of One Hundred Million Pesos (Php100,000,000.00) or its equivalent in foreign currency. These capitalizations shall remain unimpaired at any given time, otherwise, an additional capital infusion shall be made within three (3) working days from such impairment, Provided , that the Fund Manager shall comply with the additional paid-up capital, and/or other guidelines that may be prescribed by the Commission, in consideration of the nature, scale, and complexity of the Fund Manager's operations ; (iv) with sufficient human, organizational and technical resources for the proper performance of its duties, including two (2) responsible officers or a trust officer, in case of a trust entity, each of whom shall have at least five (5) years track record in fund management. At least one (1) of the responsible officers or a trust officer, in case of a trust entity, shall be available at all times to supervise the business of the Fund Manager; HEITAD 2.2 n Its physical office in the Philippines shall have a meaningful role in its business activities and must perform accounting, compliance and investor relations services in the Philippines. The following non-exhaustive factors are relevant to the assessment of the role of the Fund Manager in its business activities : (i) the composition and mandate of the Fund Manager's board of directors and management committees ; (ii) the extent to which the chief executive officer or its equivalent and directors who are resident of the Philippines participate in the formulation of investment strategies and financing activities of the Fund Manager; property acquisition; leasing; operational and financial reporting (including operating budgets); appraisals; audits; market review; accounting and reporting procedures, as well as refinancing and asset disposition plans ; (iii) Its chief executive officer or any equivalent officer, or trust officer must have two (2) full-time and qualified professional employees, who shall have a track record and experience in financial management as well as experience in the real estate industry for at least five (5) years. The chief executive officer and the 2 full-time qualified professional employees shall all be residents of the Philippines ; aDSIHc 2.3 It must comply with the requirements on the number of independent directors, as provided under Sec. 1 hereof and under relevant law or appropriate regulatory authority, such as but not limited to pertinent provisions of the SRC and the Revised Code of Corporate Governance . 2.4 The qualifications and disqualifications of the directors of the Fund Manager must comply with the provisions of the Revised Code of Corporate Governance and the fit and proper rule prescribed in this IRR . 2.5 Must comply with the additional requirements or qualifications for a Fund Manager in accordance with the Fit and Proper Rule, the Revised Code of Corporate Governance, and such relevant regulations, which the Commission may prescribe from time to time . FOR THE COMMISSION: EMILIO B. AQUINO Chairperson n Note from the Publisher: Copied verbatim from the official document. Irregular numerical sequence.