TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2024
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....he following, namely, - "(zm) "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, ....
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....ied in the Schedule IA to these regulations and shall be accompanied by a non-refundable application fee of such amount and shall be payable in the manner as specified in Schedule 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 ....
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....he SM REIT or their directors, for registration as a REIT or an SM REIT, has been rejected by the Board; and (k) whether any disciplinary action has been taken by the Board or any other regulatory authority against the SM REIT or the parties to the SM REIT or their promoters or directors under any Act or the regulations or circulars 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....
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....ted and a migration plan along with the application for certificate of registration; and (b) The applicant shall complete the migration of existing persons, entities or structures within six months from the date of grant of registration or within such period as may be specified by the Board. (3) The applicant shall comply with the provisions of this chapter in relation to the scheme being migrated, unless otherwise provided for in this chapter. Procedure where registration is refused. 26O. (1) After considering an application made under this chapter, if the Board is of the opinion 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 dealin....
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....ankers registered with the Board to carry out the obligations relating to the issue. Conditions for initial offer. 26R. (1) The investment manager shall identify the real estate assets or properties it proposes to acquire or provide the features of the real estate assets or properties including location or such other details for the particular scheme in the draft scheme offer document. (2) The investment manager shall, through a merchant banker, file the draft scheme offer document with the Board, along with fees specified in Schedule IIA and with the designated stock exchange. (3) The minimum price of each unit of the scheme of the SM REIT shall be rupees ten lakhs or such other amount as may be specified by the Board from time to time. (4) Each scheme of the SM REIT shall be identified by a separate name, which shall not be misleading and shall not portray 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 sc....
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.... of the SM REIT along with comparable lease rental income of other similar properties. (6) The comparable disclosures specified in sub-regulation (5) of this regulation shall be sourced from or certified by a valuer or any other persons as may be specified by the Board from time to time. (7) The scheme offer document shall state whether the scheme of SM REIT is with leverage or without leverage in accordance with sub-regulation (2) of regulation 26U. (8) In case of a scheme of SM REIT with no leverage, the investment manager shall, at the time of filing of the scheme offer document, submit an undertaking that the particular scheme shall not utilize any leverage in future. (9) The scheme offer document shall disclose the total expense ratio for scheme of SM REIT in such form and manner and subject to such limits as may be specified by Board from time to time. Investment conditions. 26T. (1) The SPV shall directly and solely own all assets that are acquired or proposed to be acquired by the scheme of the SM REIT, of which SPV is the wholly owned subsidiary. (2) The scheme ....
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.... opting to utilize leverage in accordance with sub-regulation (2), the total borrowings and deferred payments net of cash and cash equivalents, at the scheme level, shall not exceed forty nine per cent. of the value of the scheme assets: Provided that if the total borrowings and deferred payments net of cash and cash equivalents, at the scheme level, exceeds twenty five per cent. of the value of the scheme assets, then for any further borrowings, - (a) credit rating shall be obtained from a credit rating agency registered with the Board; and (b) approval of unit holders shall be obtained in the manner as specified in regulation 26ZM. Maintenance of website. 26V. (1) The investment manager shall, at all times, maintain a functioning website of SM REIT. (2) The investment manager shall specify on the website, the details of all the schemes of the SM REIT and details of the real estate assets and properties proposed to be acquired or acquired and held under each scheme, and such other details as may be specified from time to time by the Board. (3) The investment manag....
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....t manager shall, on behalf of the SM REIT, make prompt, true and fair disclosure of all such developments taking place between the date of filing scheme offer document with the Board and the date of allotment of units, which may have a material effect on the scheme of the SM REIT, by issuing public notices on the website of the SM REIT and designated stock exchanges and in all the newspapers in which the pre-issue advertisement was released. (4) In respect of all public communications, the investment manager on behalf of the scheme of the SM REIT shall obtain approval from the merchant bankers responsible for marketing the issue. (5) Each public communication shall, - (a) be truthful, fair and shall not be manipulative or deceptive or distorted; (b) not contain any statement or promise which is untrue or misleading; (c) reproduce all information in full and disclose all relevant facts relating to any information contained in an scheme offer document and not be restricted to select extracts; (d) be set forth in a clear, concise and understandable language; (e) not include any ....
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....ffer, the investment manager shall hold at least five per cent. of the total outstanding units at all times; (b) in a scheme of the SM REIT which has opted to undertake leverage as per disclosures in the scheme offer document filed for initial offer, the investment manager shall hold at least fifteen per cent. of the total outstanding units at all times: Provided that any holding in excess of fifteen per cent. or five per cent., as the case may be, shall be held by the investment manager for a period of at least one year from the date of listing of units issued in the initial offer. (2) The investment manager shall hold at least five per cent. of the total outstanding units in each scheme of the SM REIT, at all times, for a period of two years commencing from the fourth year of the date of listing of units in the initial offer till the end of fifth year from the date of listing of units issued in the initial offer. (3) The investment manager shall hold at least three per cent. of the total outstanding units in each scheme of the SM REIT, at all times, for a period of five years commencing fro....
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.... pay interest to investors at the rate of fifteen per cent. per annum and such interest shall not be recovered in the form of fees or any other form payable to the investment manager by the SM REIT. (3) The listing of the units of the scheme of the SM REIT shall be in accordance with the listing agreement entered into between the SM REIT and the designated stock exchange. (4) The units of the scheme of the SM REIT listed in designated stock exchanges shall be traded, cleared and settled in accordance with the bye-laws of concerned stock exchanges and such conditions as may be specified by the Board. (5) No person, other than investment manager, its related parties and its associates, shall hold units of a scheme of the SM REIT which taken together with units held by him and by persons acting in concert with him in such scheme of the SM REIT, exceed twenty-five per cent of the total outstanding units of such scheme of the SM REIT. Filing of post issue report. 26ZE. The merchant banker shall submit post-issue report, along with due diligence certificate, within seven working days of the dat....
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....ost-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 applicable. (4) The post-issue merchant banker(s) shall ensure that SM REIT, its advisors and brokers, and other persons connected with the issue do not publish any advertisement stating that issue has been oversubscribed or indicating investors' response to the issue, during the period when the public issue is still open for subscription by the public. (5) The post-issue merchant banker(s) shall continue to be responsible for post-issue activities till the subscribers have received credit to their demat account or refund of application moneys and the listing agreement is entered into by the SM REIT with the designated stock exchange and listing or trading permission is obtained. Delisting of units 26ZI. (1) The investment manager shall apply for delisting of units of the scheme of the SM REIT to the Board and the designated stock exchanges if, - (a) the per cent. of units held by the public in the scheme of the SM REIT falls below ....
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....o 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 report to the investment manager within two months from the end of the financial year: Provided that in case of any material development that may have an impact on the valuation of the assets of the scheme of the SM REIT, the investment manager shall require the valuer to undertake full comprehensive valuation of the property under consideration within two months from the date of such event. (2) The investment manager shall ensure that the valuer is not an associate of the investment manager or trustee of the SM REIT and that the signatory to the valuation reports has at least five years of experience in valuation of real estate, and possesses such other qualifications, experience and tra....
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....isition 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 declared at least once in every quarter of the financial year and not later than fifteen working days from the end of the quarter; (d) the distributions are paid to the unitholders within seven working days of such declaration. (2) If the investment manager fails to make payment within the said timelines, then the investment manager shall pay interest at the rate of fifteen per cent. per annum to the unitholders, for the....
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....stment 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 accordance with the procedure as may be specified by the Board. (5) The investment manager of a SM REIT may conduct meeting of unitholders of each sch....
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....rm; (d) the trustee and investment manager proposing 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....
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....ne number, mobile number and e-mail of the contact person(s) (c) Whether the trust / investment manager or their associates or trustee is/ are registered with the Board, the Reserve Bank of India or any other regulatory authority in any capacity along with the details of its registration (d) Details of infrastructure for conducting activities as a SM REIT II. DETAILS OF TRUST (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 r....
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....Details of past activities in real estate VI. DETAILS OF REGULATORY ACTION TAKEN IN THE PAST, IF ANY (a) Whether the SM REIT or the parties to the SM REIT or their directors are/were involved in any litigation connected with the securities market which may have an adverse bearing on the business of the SM REIT or any order has/ had been passed against them for violation of securities laws. (If yes, provide details. If no, enclose a declaration to that effect) (b) Whether any disciplinary action has been taken by the Board or any other regulatory authority against the SM REIT or the Parties to the SM REIT or their promoters or directors under any Act or the Regulations/guidelines made thereunder (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 ....
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....4) After Schedule II and before Schedule III, the following shall be inserted, namely - "SCHEDULE IIA Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 [See regulations 26I (1), 26L (1) and 26R (2)] FEES TO BE PAID WITH RESPECT TO REGISTRATION AS SM REIT 1. Every applicant shall pay non-refundable application fees of rupees one lakh along with the application for grant of certificate of registration. 2. Every applicant shall pay non-refundable registration fees of rupees ten lakh within fifteen days from the date of receipt of intimation from the Board. 3. The scheme of the SM REIT, in case of initial offering or a follow on offering shall pay non-refundable filing fees that is the higher of, rupees five lakh, and 0.1 per cent. of the total scheme issue size including intended retention of oversubscription, at the time of filing of draft scheme offer document with the Board. 4. If the issue size estimated by the SM REIT differs from eventual issue size and thereby- (a) the fees paid by the SM REIT is found to be deficient, the balance fee shall....