TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2024
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....lause shall be inserted, namely, ─ "(la) "employee unit option scheme" means a scheme under which the manager grants unit options to its employees through an employee benefit trust. Explanation. - For the above purpose, employees of the manager shall include all directors of the manager except independent directors." ii. after clause (t), the following new clause shall be inserted: "(ta) "liquid asset" means cash, units of overnight or liquid mutual fund schemes, fixed deposits of scheduled commercial banks, government securities, treasury bills, repo on government securities and repo on corporate bonds." II. in regulation 10, after sub-regulation (29), the following new sub-regulation shall be inserted, namely,- " (30) The manager may at its discretion, offer unit based employee benefit scheme for its employees based on the units of the REIT subject to compliance with the provisions of Chapter IVA of these regulations." III. after chapter IV and before chapter V, the following shall be inserted: "CHAPTER IVA FRAMEWORK FOR UNIT BASED EMPLOYEE BENEFIT SCHEME Applicability 17A. (1) The provisions of this chapter shall be applicable for all unit based e....
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....stitute a gift to the employee benefit trust. (2) Subordinate units shall not be eligible for being transferred to the employee benefit trust or being made part of a unit based employee benefit scheme. (3) The cash accumulated by the employee benefit trust on account of distributions received on units of the REIT held by such trust, income earned on the assets held by the employee benefit trust and receipt of exercise price from the employees of the manager on exercise of options, may be used by the employee benefit trust for acquiring units of the REIT either from the secondary market or during any fresh issuance of units by the REIT only for the purpose of using such units for unit based employee benefit scheme. (4) The employee benefit trust may subscribe to the units of the REIT subject to compliance with the minimum lot for primary market transaction specified under these regulations. Secondary acquisition. 17D. (1) The employee benefit trust shall not be used as a mode for trading in units of the REIT. (2) Secondary acquisition in a financial year by the employee benefit trust shall not exceed two per cent of the total outstanding units of the REIT as at the end ....
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....egulation (6) of regulation 22 of these regulations before issuance of units to the employee benefit trust; (b) issuance of units to the employee benefit trust only once in a financial year, within ninety days after the completion of the annual valuation exercise; (c) issuance of units to the employee benefit trust in compliance with the guidelines for preferential issue of units specified by the Board; (d) allotting such units of REIT directly to the employee benefit trust so that these units are used exclusively for unit based employee benefit scheme. Role of nomination and remuneration committee. 17F. (1) The nomination and remuneration committee of the manager shall be responsible for the administration and superintendence of the unit based employee benefit scheme. (2) The nomination and remuneration committee shall formulate the detailed terms and conditions of the unit based employee benefit scheme which shall include the provisions as specified in Part B of Schedule X of these regulations. (3) The nomination and remuneration committee of the manager shall frame suitable policies and procedures to ensure compliance with all securities laws particularly the Se....
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....X of these regulations, is filed and the manager obtains an in-principle approval from the recognised stock exchange(s); (c) As and when an exercise is made, the manager notifies the concerned recognised stock exchange(s) as per the statement as specified in Part E of Schedule X of these regulations. Trustee of the employee benefit trust. 17I. (1) The trustee of the employee benefit trust shall be a trustee registered with the Board under the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. (2) The trustee of the REIT shall not act as the trustee of the employee benefit trust. (3) The employee benefit trust or its trustee shall not be eligible to vote on account of the units of the REIT held by such trust. Insider trading norms. 17J. (1) The provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 shall be applicable to the manager, its directors, its key managerial personnel, sponsor, recipients of units under the unit based employe....
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....ccounting for employee share-based Payments' issued in that regard from time to time. (8) The manager granting options to its employees pursuant to a unit based employee benefit scheme shall be free to determine the exercise price subject to conforming to the accounting policies specified in sub-regulation (7) of this regulation. (9) The manager shall ensure that the explanatory statement to the notice prepared for convening a meeting of unitholders to obtain their approval for a unit based employee benefit scheme and the resolution proposed to be passed by the unitholders contain the information as specified in Part C of Schedule X of these regulations or as otherwise specified by the Board. (10) The cash accumulated by the employee benefit trust shall be deployed in liquid assets, which shall be unencumbered. (11) The unitholding of the employee benefit trust shall be shown as "non-sponsor and non-public" unitholding for the purpose of disclosure to the recognised stock exchanges. (12) In case of change in manager, the outgoing manager shall no longer receive management fees or units in lieu of management fees from the REIT and accordingly shall not offer any fresh....
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.... - Minimum Provisions in Trust Deed [See regulation 17B (4)] The trust deed shall, inter alia, provide the following: 1. Details of the trust, including: (i) Name of the trust; (ii) Object of the trust; (iii) Details of settlor; (iv) Details of scheme(s) administered; (v) Source(s) of funds; (vi) Description of the manner in which the trust funds shall be used for meeting the objects of the trust; (vii) Description of the classes of beneficiaries along with their rights and obligations; (viii) Details of trustee. 2. Powers and duties of trustee, including: (i) To frame rules for administration of the scheme(s) in compliance with the scheme documents, object(s) of the trust and these regulations; (ii) To maintain books of account of the trust as required under law including these regulations; 3. Mode and manner of dissolution of the trust; 4. Duties of the trustee shall include that: (i) the trustee shall act in the interest of employees who are beneficiaries of the trust subject to provisions of these regulations, (ii) the trustee shall not act in any manner or include any provision in the trust deed that would be detrimental to the interests of the b....
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....nd be beneficiaries in the scheme(s); d. requirements of vesting and period of vesting; e. maximum period (subject to these regulations) within which the options shall be vested; f. exercise price, purchase price or pricing formula; g. exercise period/offer period and process of exercise/ acceptance of offer; h. the appraisal process for determining the eligibility of employees for the scheme(s); i. maximum number of options to be offered and issued per employee and in aggregate, if any; j. maximum quantum of benefits to be provided per employee under a scheme(s); k. whether the scheme(s) involves new issue of units by the REIT or gift or secondary acquisition by the trust or all; l. maximum percentage of secondary acquisition (subject to limits specified under the regulations) that can be made by the trust for the purposes of the scheme(s); m. a statement to the effect that the manager shall conform to the accounting policies specified in regulation 17K(7); n. the method which the manager shall use to value the options; o. period of lock-in. Part D - Information required in the statement to be filed with recognised Stock Exchange(s) [See regulation 17....
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....justment. 26. Whether amount paid/payable by the employee at the time of the grant, vesting or exercise of the options will be forfeited if the employee does not exercise the same within the exercise period? Clause in scheme describing such adjustment. 27. Details of approval of unitholders pursuant to sub-regulation (6) of regulation 22 of these regulations with respect to: (a) Grant to identified employees, during any one year, equal to or exceeding 1% of the unit capital of the REIT at the time of grant. 28. Details of the variation made to the scheme along with the rationale therefor and the details of the employees who are beneficiary of such variation: Sd/- Company Secretary / Compliance Officer Place: Date: Documents to be filed with registration statement 1. Copy of scheme, certified by the Company Secretary / Compliance Officer. 2. Copy of notice of unitholder meeting approving the scheme/for amending the scheme/for approving grants under 22(6)(m) of these regulations certified by the Company Secretary / Compliance Officer. 3. Copy of resolution of unitholders for approving the scheme/ for amending the scheme/for approving grants under sub-regulation (6) of r....
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.... the recognised Stock Exchange : 4. Filing Number, if any : 5. Title of the Scheme pursuant to which units are issued, if any: 6. Kind of security to be listed : 7. Date of issue of units : 8. Number of units issued : 9. Unit Certificate No., if applicable : 10. Distinctive number of the units, if applicable : 11. ISIN Number of the units : 12. Exercise price per unit: 13. Total issued units after this issue : 14. Total issued unit capital after this issue : 15. Details of any lock-in on the units : 16. Date of expiry of lock-in : 17. Details of listing fees, if payable: Signature of Company Secretary/Compliance Officer Date: Place: Part F - Disclosures in the annual report of the REIT [See regulation 17L(1)] The manager in the annual report of the REIT shall disclose any material change in the scheme(s) and whether the scheme(s) is / are in compliance with the regulations. Further, the following details, inter alia, shall be disclosed on the REIT's website and a web-link thereto shall be provided in the annual report. A. Relevant disclosures in terms of the accounting standards prescribed by the Central Government in terms of section 133 of the Companies A....
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....expected dividends, the risk-free interest rate and any other inputs to the model; (b) the method used and the assumptions made to incorporate the effects of expected early exercise; (c) how expected volatility was determined, including an explanation of the extent to which expected volatility was based on historical volatility; and (d) whether and how any other features of the options granted were incorporated into the measurement of fair value, such as a market condition. C. Details related to Trust (i) The following details, inter alia, in connection with transactions made by the Trust meant for the purpose of administering the schemes under the regulations are to be disclosed: (ii) General information on all schemes Sl. No. Particulars Details 1. Name of the Trust 2. Details of the Trustee 3. Any other contribution made to the Trust during the year (iii) Brief details of transactions in units by the Trust (a) Number of units held at the beginning of the year; (b) Number of units acquired during the year through (i) primary issuance (ii) secondary acquisition, also as a percentage of unit capital as at the end of the previous financial year, al....
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....of the scheme of the manager including the conditions regarding vesting, exercise, adjustment for corporate actions, and forfeiture of vested options. It shall not be necessary to include this Part if it has already been provided to the employee in connection with a previous grant and no changes have taken place in the scheme since then. If the scheme administrator provides advisory services to the grantees in connection with the exercise of options or sale of resulting units, such advice shall be accompanied by an appropriate disclosure of concentration and other risks. The scheme administrator shall conform to the code of conduct appropriate for such fiduciary relationships." BABITHA RAYUDU, Executive Director [ADVT.-III/4/Exty./285/2024-25] 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, 201....