TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2024
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.... "REIT" or "Real Estate Investment Trust" means a person that pools rupees fifty crores or more for the purpose of issuing units to at least two hundred investors so as to acquire and manage real estate asset(s) or property(ies), that would entitle such investors to receive the income generated therefrom without giving them the day-to-day control over the management and operation of such real estate asset(s) or property(ies). Explanation 1. - For the purpose of these regulations, a REIT or Real Estate Investment Trust shall include an SM REIT under Chapter VIB of these regulations. Explanation 2. - For the removal of doubts, it is hereby clarified that for the purpose of these regulations, any company which acquires and manages real estate asset(s) or property(ies) and offers or issues securities to the investors, shall not be construed as a REIT or Real Estate Investment Trust;" (2) After Chapter VIA and before Chapter VII, the following shall be inserted, namely, - "CHAPTER VIB SMALL AND MEDIUM REITS Applicability. 26G. The provisions of these regulations, except chapters II, IV, V and regulation 22 under chapter VI, shall mutatis mutandis be applicable to SM REITs,....
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....e IIA to these regulations. (2) The Board may, in order to protect the interests of investors, appoint any person to take charge of records, documents of the SM REIT and for this purpose, also determine the terms and conditions of such an appointment. (3) The Board shall take into account requirements as specified in these regulations for considering the grant of certificate of registration. Eligibility criteria. 26J. (1) For the purpose of the grant of certificate to the trust, the Board shall consider all matters relevant to the activities of the trust as an SM REIT. (2) Without prejudice to the generality of the foregoing provision, the Board shall consider the following, namely,- (a) the applicant is the investment manager on behalf of the trust and the instrument of trust is in the form of a deed duly registered in India under the provisions of the Registration Act, 1908; (b) the trust deed has its main objective as undertaking activity of SM REIT through one or more schemes in accordance with these regulations and includes responsibilities of the trustee in accordance with these regulations; (c) separate persons have been designated as investment manager of th....
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....lars issued thereunder. Furnishing of further information, clarification and personal representation. 26K. (1) The Board may require the applicant to furnish any information or clarification as may be required by it for the purpose of processing of the application for registration. (2) The Board, if it so desires, may require the applicant or any authorized representative to appear before the Board for personal representation in connection with the grant of certificate. Procedure for grant of certificate. 26L. (1) The Board, on being satisfied that the trust fulfils the requirements specified in this chapter, shall send an intimation to the trust and on receipt of the payment of registration fees as specified in Schedule IIA, grant the certificate of registration in Form B under Schedule IA. (2) The registration may be granted with such conditions as may be deemed appropriate by the Board. Conditions of certificate. 26M. (1) The certificate granted under this chapter shall be subject to such conditions as the Board may deem appropriate, including, - (a) the SM REIT shall abide by the provisions of the Act and these regulations; (b) the SM REIT shall adhere to th....
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....nion that a certificate should not be granted to the trust, it may reject the application after giving the applicant a reasonable opportunity of being heard. (2) The decision of the Board to reject the application shall be communicated to the applicant within thirty days of such decision. Eligible issuers. 26P. (1) An SM REIT shall not be eligible to make an initial offer of units of a scheme if: (a) the SM REIT or the parties to the SM REIT are debarred from accessing the securities market or dealing in securities by the Board; (b) any of the promoters, promoter group or directors of the parties to the SM REIT are debarred from accessing the securities market or dealing in securities by the Board; (c) any of the promoters or directors of the parties to the SM REIT is a promoter or director of another company which is debarred from accessing the securities market by the Board; (d) the SM REIT or the parties to the SM REIT or any of the promoters or directors of the parties to the SM REIT are wilful defaulters; (e) any of the promoters or whole-time directors of the parties to the SM REIT is a promoter or whole-time director of another company which is a wilful defau....
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.... any guaranteed returns to the investors. (5) The value of real estate assets or properties in each scheme shall be at least fifty crore rupees. (6) The investment manager and the trustee shall ensure that the assets of each scheme, the bank accounts, investment or demat accounts and the books of accounts of each scheme are segregated and ring-fenced. (7) The investment manager and the trustee shall ensure that the property documents evidencing the title to the real estate assets or properties along with the related papers shall be duly maintained in safe-deposit boxes, at a scheduled commercial bank and be annually inspected by the trustee. (8) The draft scheme offer document filed with the Board shall be made public, for comments, if any, by hosting it on the websites of the Board, designated stock exchanges and merchant bankers associated with the issue, for a period of not less than twenty-one days. (9) The Board may issue observations, if any, to the merchant banker within thirty days from the later of: (a) the date of receipt of the draft scheme offer document; (b) the date of receipt of satisfactory reply from the merchant banker, where the Board has sought any....
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....value of the schemes' assets for each of its schemes in completed and revenue generating properties and shall not invest in under-construction or non-revenue generating real estate assets: Provided that up to five per cent. of the value of the schemes' assets may be invested in liquid assets, which are unencumbered. (3) The scheme of SM REIT shall not be permitted to lend to any entity other than lending to its own SPV. (4) The SPV shall not be permitted to lend to any entity. Modes of fund raising. 26U. (1) The scheme of the SM REIT may raise funds from any investor whether Indian, or foreign by way of issuance of units: Provided that investment by foreign investors shall be subject to the guidelines as may be specified by Reserve Bank of India and the Government of India from time to time. (2) The scheme of a SM REIT and the SPV(s) thereunder may undertake leverage if the option to undertake leverage is disclosed in the scheme offer document filed for initial offer. (3) With regard to modes of fund raising by a scheme of SM REIT, the following shall apply: (a) The scheme of the SM REIT shall raise capital only by way of issuance of units pertaining to the partic....
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....ilable on its website or on any other medium of communication. Issue period. 26W. The issue period shall not be more than thirty days. Dematerialization. 26X. (1) The SM REIT shall issue units of its scheme only in dematerialized form. (2) The investments of scheme of the SM REIT in SPV(s) shall be held in dematerialized form. Subscriptions from investors. 26Y. (1) The investment manager of the SM REIT shall use the book building platform of designated stock exchange to accept bids from investors for units of the scheme of the SM REIT, where the amount shall be blocked through the Application Supported by Blocked Amount mechanism. (2) The investment manager of the SM REIT shall provide the web-link of the platform of the designated stock exchange for subscription of units of the scheme of the SM REIT, on the website of SM REIT. (3) The minimum subscription amount from any investor in any offer shall be rupees ten lakhs or such amount as may be specified by the Board from time to time. Advertisements. 26Z. (1) The SM REIT may issue an advertisement pertaining to the issue of units of a scheme. (2) The public communication including advertisement, publicity m....
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....creen in any issue advertisement on television screen, and the advertisement shall advise the viewers to refer to the scheme offer document for details; (k) not contain expletives or non-factual and unsubstantiated titles; and (l) state the risk factors with equal importance in all respects including print size of not less than point seven size, if the advertisement contains highlights. (6) No such public communication issued during the issue period shall give any impression that the issue has been fully subscribed or oversubscribed. (7) No such public communication shall contain any offer of incentives, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise. Prohibition on payment of incentives. 26ZA. No person connected with the issue of units of the scheme of the SM REIT shall offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise to any person for making an application in the issue, except for fees or commission for services rendered in relation to the issue. Lock-in requirements. 26ZB (1) The minimum unitholding requirement applicable to the investment manager for the....
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....ssued to investors against swap of securities allotted prior to the date of this chapter coming into force by an SM REIT that has received a certificate of registration pursuant to an application made under sub-regulation (1) of regulation 26N, shall not be considered for calculating the total outstanding units of the schemes of the SM REIT under this regulation. Allotment procedure and basis of allotment. 26ZC. (1) On receipt of the sum payable on application, the investment manager shall, on behalf of the scheme of the SM REIT, allot the units to the applicants. (2) The authorized representatives of the designated stock exchange along with the post issue merchant bankers and registrars to the issue of the scheme of the SM REIT shall ensure that the basis of allotment is finalized in a fair and proper manner. Allotment and listing. 26ZD. (1) The units of the scheme of the SM REIT shall be mandatorily listed on the recognized stock exchange(s) having nationwide trading terminals. (2) The units of the SM REIT of the particular scheme shall be allotted and listed with such timelines as may be specified by the Board from time to time: Provided that if the investment mana....
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....ue merchant banker. 26ZH. (1) The obligations of the post-issue merchant banker(s) with respect to all matters relating to post-issue, including refund, allotment, payment of interest to applicants in case of delayed allotment or refund, shall be as per the disclosure in the scheme offer document. (2) The post-issue merchant banker(s) shall regularly monitor redressal of investor grievances relating to post-issue activities such as allotment, refund, etc. in such manner as may be specified by the Board. (3) The post-issue merchant banker(s) shall ensure that advertisement giving details relating to oversubscription, basis of allotment, number, value and percentage of all applications, number, value and percentage of successful allottees for all applications, date of completion of dispatch of refund orders or instructions to Self-Certified Syndicate Banks by the Registrar, date of dispatch of certificates and date of filing of listing application, etc. is released within ten days from the date of completion of the post-issue activities on the websites of the SM REIT and designated stock exchanges, and in all the newspapers in which the pre-issue advertisement was released, if ....
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....the SM REIT including provision of exit option to the unit holders shall be in accordance with the listing agreement and in accordance with procedure as may be specified by the Board and by the designated stock exchanges from time to time. (6) The investment manager of scheme of the SM REIT shall sell the assets of the scheme in order to redeem the units of the unitholders for the purpose of delisting of units of the scheme of the SM REIT and shall wind up the scheme of the SM REIT, in such manner as may be specified by the Board. (7) If all schemes of SM REIT are delisted, the SM REIT shall surrender its certificate of registration to the Board and shall no longer undertake activity of a SM REIT: Provided that the SM REIT and parties to the SM REIT shall continue to be liable for all their acts of omissions and commissions committed prior to the surrender of the certification, with respect to activities of the SM REIT or its schemes notwithstanding such surrender. Valuation of assets. 26ZJ. (1) The investment manager shall ensure that valuer shall carry out the full comprehensive valuation of the assets of each scheme of the SM REIT on an annual basis, and submits its re....
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....isting property, the investment manager shall require the valuer to undertake a full comprehensive valuation of that property. (10) The investment manager shall ensure that the valuer does not value any assets, which it has valued within the preceding twelve months prior to the acquisition of the asset by the scheme of the SM REIT. Explanation.- For the purposes of this sub-regulation, it is hereby clarified that nothing in this sub-regulation shall apply if the valuer had been engaged by the SM REIT for the acquisition or disposal of the asset that is to be valued. Distributions. 26ZK. (1) With respect to distributions made by the scheme of SM REIT and SPV, the investment manager shall ensure, - (a) not less than ninety-five per cent. of net distributable cash flows of the SPV are distributed to the scheme of SM REIT subject to applicable provisions in the Companies Act, 2013: Provided that the amount retained by the SPV shall be utilized only in such manner as may be specified by the Board from time to time; (b) hundred per cent. of the net distributable cash flows of the scheme of SM REIT shall be distributed to the unit holders; (c) the distributions are declare....
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....er cent of the unit holders of the scheme entitled to vote at such meeting; (f) no person who is interested in any transaction as well as associates of such person(s) shall vote on any matter related to that transaction; (g) investment manager shall be responsible for all the activities pertaining to the meeting of the unit holders of scheme, subject to oversight of the trustee: Provided that in issues pertaining to the investment manager including change in the investment manager, removal of the investment manager, change in control of the investment manager, the trustee shall convene and handle all activities pertaining to conduct of the meetings of unit holders: Provided further that in respect of issues pertaining to the trustee including change in the trustee, the trustee shall not be involved in any manner in the conduct of the meeting. (3) An annual meeting of unit holders of each scheme shall be held at least once every year, within one hundred and twenty days from the end of financial year and the time between two meetings shall not exceed fifteen months. (4) The investment manager or the trustee, as applicable, of the SM REIT shall conduct the meetings in acco....
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....oposing to seek voluntary delisting of units of the scheme of the SM REIT; (e) any issue, not in the ordinary course of business, which in the opinion of the investment manager or trustee requires approval of the unitholders; (f) any issue, which in the opinion of the Board or the recognized stock exchanges, requires approval under this sub-regulation; (g) removal of the auditor or valuer and appointment of another auditor or valuer to the SM REIT; (h) change in the trustee; (i) delisting of the scheme of the SM REIT if the unit holders have sufficient reason to believe that such delisting would act in the interest of the unitholders; and (j) extension of time period as specified under clause (b) of sub-regulation (1) of regulation 26ZI. (11) The unitholders of the scheme of SM REIT may request any matter to be taken up in the unitholders' meeting of such scheme if ten per cent. of the unitholders of a particular scheme by value, apply in writing, to the trustee and the trustee shall require the investment manager to place the matter for voting in accordance with these regulations: Provided that the request of the unitholders of a scheme for change in the trustee ....
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....UST (a) Write-up on the activities of the trust (b) Whether the trust deed is registered under the provisions of the Registration Act, 1908 (c) Whether the trust deed has its main objective as undertaking activity of SM REIT and includes responsibilities of the trustee in accordance with these Regulations (Enclose relevant extract of the Registered Trust Deed) III. DETAILS OF TRUSTEE (a) Name, address of registered office, address for correspondence and principal place of business, telephone number(s), fax number(s), e-mail address of the Trustee (b) Name, direct line number, mobile number and e-mail of the contact person(s) (c) Brief write up on the activities of the trustee (d) Details of registration as a debenture trustee (e) Details of infrastructure, personnel, etc. relevant to the activity as trustee of the SM REIT (f) Identity and address proof of the trustee and its directors (g) Whether the trustee company is registered with any regulatory authority other than the Board in any capacity along with the details of its registration (h) Copy of the executed trust deed IV. DETAILS OF INVESTMENT MANAGER (a) Name, address of the registered office addre....
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....hereunder (If yes, provide details. If no, enclose a declaration to that effect) (c) Whether SM REIT or the Parties to the SM REIT or their directors has/ have been refused a certificate by the Board or its/ their certificate has been suspended at any time prior to this application. (If yes, provide details. If no, enclose a declaration to that effect) VII. OTHER INFORMATION/DECLARATIONS (a) Declaration that the investment manager shall comply with the lock-in conditions as specified under these regulations. (b) Declaration that the SM REIT and the parties to the SM REIT shall be fit and proper persons based on the criteria specified in the Securities and Exchange Board of India (Intermediaries) Regulations, 2008. DECLARATION STATEMENT (TO BE GIVEN AS BELOW) We hereby agree and declare that the information supplied in the application, including the attachment sheets, is complete and true. AND we further agree that, we shall notify the Securities and Exchange Board of India immediately any change in the information provided in the application. We further agree that we shall comply with, and be bound by the Securities and Exchange Board of India Act, 1992, and the Sec....
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....d thereby- (a) the fees paid by the SM REIT is found to be deficient, the balance fee shall be paid by the issuer along with filing of the final scheme offer document with the recognized stock exchanges, as the case may be; and (b) if any excess fee is found to have been paid to the Board, it shall be refunded by the Board to the SM REIT. 5. Such application, registration and filing fees shall be paid by the applicant or SM REIT, as applicable, by way of direct credit into the bank account through NEFT/RTGS/IMPS or online payment using the SEBI Payment Gateway or any other mode as may be specified by the Board from time to time." BABITHA RAYUDU Executive Director [ADVT.-III/4/Exty./818/2023-24] Footnotes: 1. The Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 was published in the Gazette of India on September 26, 2014 vide No. LAD-NRO/GN/2014/15/11/1576. 2. The Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 was subsequently amended by the - a. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2016, vide No. SEBI/LAD/NRO/GN/2016-17/022, with e....