Sebi announces two more ease-of-doing-business measures for REITs and InvITs

REITs, or Real Estate Investment Trusts, are investment trusts that own and manage real estate properties, producing capital gains on their investments as well as consistent income, much like mutual funds. They aggregate investor capital, providing investors with a liquid means of entering the real estate market, portfolio diversification, and long-term capital growth. Other than this, REITs and InvITs are subject to favorable tax laws, such as exemptions from capital gains tax and dividend distribution tax. Similar to mutual funds, infrastructure investment trusts, or InvITs, aggregate capital from investors who own and manage operational infrastructure assets, such as roads, highways, pipelines, warehouses, power plants, etc. They provide both steady income (in the form of dividends) and long-term capital growth. The Nifty REITs & InvITs index is designed to track InvITs and REITs that are listed and traded on public markets and are able to transact even though they are not listed on the National Stock Exchange. Each security in the index has a weight based on its free float market capitalization; these weights are limited to 33% for each security and 72% for the top 3 securities collectively.

REITs and InvITs easy-to-do business measures from SEBI:

Two circulars issued on August 22 have extended the deadline for infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) to submit the statement of deviation(s) in the use of issue proceeds. One of the changes for the two asset classes for the two ease-of-doing businesses that the Securities and Exchange Board of India (Sebi) has announced is this one. The deadline for REITs and InvITs to submit these requests was previously 21 days after the conclusion of each quarter. REITs and InvITs may submit these along with their financial results thanks to the recent changes made for ease of doing business (EoDB) and to align the provisions with the LODR Regulations.

The quarterly results must be submitted within 45 days of the end of each quarter, per Regulation 33(3) of the LODR Regulations. The Listing Obligations and Disclosure Requirements (LODR) Regulations stipulate that the Board of Directors of the listed entity must present this statement to the Board of Directors on a quarterly basis, rather than requiring a prior review by the Board of Directors.

“The Trustee and the Board of Directors/Governing Body of the Manager shall ensure that all investor complaints are redressed by the Manager in a timely manner,” states the new amendment to the REITs master circular. Additionally, the statement mentioned in Paragraph 4.16.3 above must be presented for review to the Board of Directors/Governing Body of the Manager and the Trustee on a quarterly basis.”

The format and deadline for disclosing and filing investor complaints received via the SCORES platform with stock exchanges are outlined in paragraph 4.16.3 (within 21 days of the end of the quarter or the end of the financial year). For InvITs, the master circular has undergone the same alteration.

Conclusion: SEBI is ensuring that REITs and InvITs will not encounter significant problems and that conducting business in accordance with the existing regulations will be simple for them.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.