TMI BlogSecurities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2024X X X X Extracts X X X X X X X X Extracts X X X X ..... m) 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, unless otherwise pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rests 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 the SM REIT and trustee of the SM REIT under these regulations; (d) with regard to the invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 the migration plan, if applicable, submitted by it to the Board at the time of application for certificate of registration under this chapter; (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 defaulter; (f) any of the promoters or directors of the parties to the SM REIT is a fugitive economic offender; or (g) any fine or penalties levied by the Board or stock exchanges is pending to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach 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 clarification or additional information from the merchant banker; (c) the date of receipt of clarification or information from any regulator or agency, where the Board has sought any clarification or information from such regulator or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vested 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 particular scheme. (b) For a scheme of SM REIT opting to utilize leverage in accordance with sub-regulation (2), the scheme may undertake leverage through borrowings or issuance of debt securities under Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ialized 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 material, research reports, etc. concerned with the issue shall not be misleading and shall not contain any matter extraneous to the contents of the scheme offer document. Explanation. Public communication includes corporate, project and issue related advertisements of the SM REIT, interviews, blogs, and social media posts by its investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntains 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 period of first three years commencing from the date of listing of units in the initial offer till the end of the third year from the date of listing of units in the initial offer, shall be as under: (a) in a scheme of the SM REIT which has opted not to undertake leverage as per disclosures in the scheme offer document filed for initial offer, the investment manager shall hold at le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. 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 manager fails to allot or list units within the specified timelines, the investment manager shall 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 bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment, 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 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 activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 delayed period and such excess interest shall not be recovered by the investment manager from the SM REIT in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 scheme through video conferencing or through other audio-visual means. (6) In the annual meeting of unitholders of each scheme, the investment manager shall place following matters before the unit holders for consideration of: (a) latest annual accounts and audit report of the SM REIT and its schemes, and a report on performance of the scheme of the SM REIT; (b) the appointment of, and the fixing of the fees of the auditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 shall be sent, in writing, to the investment manager, who shall, on receipt of such a request, place the matter for voting in the manner as specified in accordance with these regulations. Investor Grievance Redress 26ZN . The investment manager shall abide by the guidelines and circulars issued by the Board in relation to the SCORES and Online Dispute Resolution for resolution of investor grievances and disputes, including depositing such amount with the designated body as may be specified by the Board. (3) After Schedule I and before Schedule II, the following shall be inserted, namely, SCHEDULE IA FORMS APPLICABLE TO S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee (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 address for correspondence, telephone number(s), fax number(s), of the Investment Manager (b) Name, direct line number, mobile number and e-mail of the contact person(s) (c) Legal status, date and place of incorporation/ establishment, wherever applicable (d) Copy of executed investment management agreement (e) Write up on the activities of the investment manager, including past experience in real estate industry or real estate fund management (f) Details of the key managerial personnel including experience including past experience real estate industry or real estate fund management, and professional qualification (g) List of directors (h) Identity proof and address proof of the investment manager, its di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EN 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 Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014, and any other regulations, guidelines or circulars as may be notified or issued by the Securities and Exchange Board of India from time to time. We further agree that as a condition of registration, we shall abide by such operational instructions/directives as may be issued by the Securities and Exchange Board of India from time to time. For and on behalf of___________________________________________________ (Name of the applicant) Authorized signatory (Signature) FORM B Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 [See regulation 26L (1)] Certificate of registration as a SM REIT I. In exercise of the powers conferred by sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tte 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 effect from November 30, 2016; b. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2017, vide No. SEBI/LAD-NRO/GN/2017-18/022, with effect from December 15, 2017. c. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, vide No. SEBI/LAD-NRO/GN/2018/06, with effect from April 10, 2018. d. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2019, vide No. SEBI/LAD-NRO/GN/2019/09, with effect from April 22, 2019. e. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/06, with effect from March 02, 2020. f. Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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