The Securities and Exchange Board of India (SEBI) has recently announced two significant ease-of-doing-business measures aimed at streamlining processes for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). These changes, outlined in circulars issued on August 22, 2024, are designed to reduce compliance burdens and align the operations of these asset classes with the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations.
Key Amendments for REITs and InvITs:
Extended Timeline for Deviation Statements: Previously, REITs and InvITs were required to submit statements of deviation(s) in the use of issue proceeds within 21 days from the end of each quarter. However, SEBI has now granted these asset classes additional time to submit these details. Under the new regulations, REITs and InvITs can now submit their deviation statements alongside their financial results, offering more flexibility and reducing the rush to meet earlier deadlines.
Revised Submission Process: Another key amendment relates to the process of reviewing investor complaints. Until now, REITs and InvITs were obligated to have the statement of investor complaints reviewed by the Board of Directors of the Manager before submission to the stock exchanges. This requirement, which was not in line with LODR Regulations, has now been relaxed. The move is expected to further streamline the reporting process and ease the operational burden on these entities.
Impact of the New Measures:
The latest SEBI amendments are a part of its ongoing efforts to create a more favorable regulatory environment for REITs and InvITs, which are rapidly becoming popular investment avenues in India. By aligning these provisions more closely with the LODR Regulations, SEBI aims to enhance operational efficiency and reduce compliance-related pressures on these asset classes.
For investors, these changes mean that REITs and InvITs will have more time to accurately report deviations in the use of funds, leading to better transparency and more reliable data. Additionally, the simplified process for reviewing investor complaints is likely to improve investor confidence in these instruments.
Conclusion:
SEBI’s recent ease-of-doing-business measures for REITs and InvITs mark a significant step towards simplifying regulatory compliance and enhancing the operational efficiency of these asset classes. As REITs and InvITs continue to gain traction in India’s real estate and infrastructure markets, these amendments are expected to contribute positively to their growth and investor appeal.
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