The settlement and protection of investors: the NSSMC has finalized the license conditions of property management activities for real estate financing transactions

The NSSMC (National Securities and Stock Market Commission) approved a finalized Draft Resolution On Approval of License Conditions for Conducting Professional Activities in the Capital Markets – Property Management Activities for Financing Construction Objects and/or Real Estate Transactions. Such a Resolution was made by the Commissioners at one of the last meetings of the Regulator.

“We have established the requirements that are mandatory when obtaining a license to conduct the professional activities in the capital markets – property management activities for financing construction objects and/or real estate transactions, as well as when carrying out such activities. We also outlined the specifics of combining this type of work with certain types of professional activities in the capital markets, – says Arsen Ilin, the Commissioner. – First of all, we were guided by the need to regulate all aspects and protect the rights and interests of investors. After all, this is quite a common way of financing construction, particularly, in the regions – it covers 12-13% of the market. Therefore, as a Regulator, we must ensure the protection of those who want to invest in such a popular asset as real estate.”

The Draft License Conditions cover the full range of issues related to property management activities for financing construction objects and/or real estate transactions. The document states:

– the requirements to be met by the applicant for obtaining a license and by licensee during carrying out of property management activities;

– the organizational and operational requirements;

– the requirements for the initial, authorized and own capital of the applicant and licensee;

– the requirements for technical and software maintenance;

– the requirements to the internal documents of the applicant/licensee;

– the requirements for the disclosure of information by the licensee;

– the requirements for the applicant/licensee’s premises;

– the requirements for the applicant/licensee’s employees;

– the list of documents to be submitted by the applicant for obtaining a license;

– the information that the licensee submits to the NSSMC during the property management activities.

It is now planned to approve the Draft License Conditions with the ministries and departments concerned, and then – the procedure of entry into force.