The Security and Exchange Board of India (SEBI) on Tuesday notified the Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2020.
The notification seeks amends the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014.
In the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014, In regulation 2, in sub-regulation (1) after clause (qa), a new clause (qaa) shall be inserted, namely “inducted sponsor” means any person who has been inducted as a sponsor in accordance with sub-regulation (8) of regulation 22.”
The notification further inserts Regulation 7A which pertains to De-classification of the status of the sponsor which says De-classification of the status of a sponsor(s) of a REIT whose units have been listed on the stock exchanges for a period of three years shall be permitted upon receipt of an application from the REIT and subject to compliance with the conditions.
Firstly, the unit holding of such sponsors and its associates took together does not exceed 10% of the outstanding units of the REIT.
Secondly, the manager of the REIT is not an entity controlled by such a sponsor or its associates.
Thirdly, the sponsor or its associates are not fugitive economic offender;
Lastly, approval of unitholders has been obtained in accordance with sub-regulation 5 of Regulation 22.
In regulation 14, in sub-regulation (2), a new clause shall be inserted after clause (ba), namely, “maximum subscription from any investor other than sponsor(s), its related parties and its associates shall not be more than 25 percent of the total unit capital”.
In regulation 22, after sub-regulation (6), the new sub-regulation shall be inserted, namely, “No person, other than sponsor(s), its related parties and its associates, shall acquire units of a REIT which taken together with units held by him and by persons acting in concert with him in such REIT, exceeds twenty-five percent of the value of outstanding REIT units unless approval from seventy-five percent. of the unitholders by value excluding the value of units held by parties related to the transaction, is obtained. Provided that if the required approval is not received, the person acquiring the units shall provide an exit option to the dissenting unitholders to the extent and in the manner as may be specified by the Board.”
They shall come into force on the date of their publication in the Official Gazette.
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