Investment conditions and distribution policy

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....n agreement ^4[has been] entered into with such shareholders or partners to that effect prior to investment in the SPV]: ^5[Provided that the shareholders' agreement or partnership agreement shall provide for an appropriate mechanism for resolution of disputes between the REIT and the other shareholders or partners in the SPV: Provided further that the provisions of these regulations shall prevail in case of inconsistencies between such agreement(s) and the obligations cast upon a REIT under these regulations.] ^6[(b) the manager, in consultation with the trustee, shall appoint atleast such number of nominees on the board of directors or the governing board of such SPVs, as applicable, which are in proportion to the shareholding or holding interest of the REIT in the SPV;] (c) the manager shall ensure that in every meeting including annual general meeting of the SPV, the voting of the REIT is exercised ^7[****]. ^8[(3A) The REIT may invest in properties through holdco subject ^9[to] the following,- (a) the ultimate holding interest of the REIT in the underlying SPV(s) is not less than twenty six per cent; (b) no other shareho....

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....onstruction properties which shall be held by the REIT for not less than three years after completion; (ii) under-construction properties which are a part of the existing income generating properties owned by the REIT which shall be held by the REIT for not less than three years after completion; (iii) completed and not rent generating properties which shall be held by the REIT for not less than three years from date of purchase; (b) listed or unlisted debt of companies or body corporate in real estate sector: Provided that this shall not include any investment made in debt of the ^22[holdco and/or SPVs]; (c) mortgage backed securities;  (d) equity shares of companies ^23[which are] listed on a recognized stock exchange in India which derive not less than seventy five per cent. of their operating income from real estate activity as per the audited accounts of the previous financial year; ^24[(da) unlisted equity shares of companies which derive not less than seventy five per cent. of their operating income from real estate activity as per the audited accounts of the previous financial year: Provided that t....

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....stment shall only be made as a user or a client of such interest rate derivative, and shall not be in the nature of market making; C. adequate disclosures regarding investment in interest rate derivative shall be made in the annual report; D. for valuation of the investment in interest rate derivative, norms applicable for Mutual Funds shall be followed; and E. the requirements applicable to the clients or users of interest rate derivatives, including those specified by the Reserve Bank of India, are complied with. (k) equity shares of a company exclusively holding common infrastructure subject to the condition that the REIT, its HoldCo(s) and/or SPV(s) shall own entire shareholding and interest in such company.] ^25[(5A) The investment conditions as specified at sub-regulation (4) and (5) of regulation 18 shall be complied at the time of Offer document and thereafter.] ^56[(5B) A REIT may, either directly or through its HoldCo(s) or SPV(s), invest in assets falling under the purview of infrastructure if holding of such infrastructure asset is to earn fixed rental income from leasing out of such asset without assumption of any risk or rewar....

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....n case of any co-investment with any person(s) in any transaction,- (a) the investment by the other person(s) shall not be at terms more favourable than those to the REIT; (b) the investment shall not provide any rights to the person(s) which shall prevent the REIT from complying with the provisions of these regulations; (c) the agreement with such person(s) shall include the minimum percentage of distributable cash flows that will be distributed and entitlement of the REIT to receive not less than pro rata distributions and mode for resolution of any disputes between the REIT and the other person(s). (16) With respect to distributions made by the REIT and the ^36[holdco and/or] SPV,- (a) not less than ninety per cent. of net distributable cash flows of the SPV shall be distributed to the REIT ^37[/holdco] in proportion of its holding in the SPV subject to applicable provisions in the Companies Act, 2013 or the Limited Liability Partnership Act, 2008; ^38[(aa) with regard to distribution of net distributable cash flows by the holdco to the REIT, subject to applicable provisions in the Companies Act, 2013 or the Limited Liability Partn....

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....e REIT. ^44[(f) any amount remaining unclaimed or unpaid out of the distributions declared by a REIT in terms of sub-clause (c), shall be transferred to the 'Investor Protection and Education Fund' constituted by the Board in terms of section 11 of the Act, in such manner as may be specified by the Board ^45[:]] ^46[Provided that the amount transferred to Investor Protection and Education fund shall not bear any interest.] ^47[(g) the unclaimed or unpaid amount of a person that has been transferred to the Investor Protection and Education Fund in terms of sub-clause (f), may be claimed in such manner as may be specified by the Board.] (17) No schemes shall be launched under the REIT. (18) The Board may specify any additional conditions for investments by the REIT as it deems fit.     **************** NOTES:- 1 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 2 Substituted for the word "have" by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 3 Inserted by the SEBI (Real Estate Inves....

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....Omitted "proportionate to the holding of the REITs" by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 20 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 21 Omitted "in which not more than ten per cent. of value of the REIT assets shall be invested," by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 22 Substituted for "SPV" by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 23 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 24 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 25 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 26 Substituted for "seventy five" by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 27 Inserted by the Securities and Exchange Boar....

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....tment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 43 Substituted for "and (b)" by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 44. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/123 dated 14-02-2023 45. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/160 dated 20-10-2023 before it was read as, "." 46. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/160 dated 20-10-2023 47. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/160 dated 20-10-2023 48.  Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. sixtieth day from the date of its publication in the Official Gazette before it was read as, "and made" 49.  Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. sixtieth day from the date of its publication in the Official Gazette before it was read as, "not later than fifteen days from the date of such declaration" 50.  Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/208 dated 26-09-2024 w.e.f. sixtieth day from the date of its publication in the Official G....