Regulation 17K - Other requirements - Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014

1 [Other requirements. 17K. (1) The units held by the employee benefit trust shall be used only for the purpose of offering unit based employee benefit scheme. (2) The employee benefit trust shall not undertake any transfer or sale of units of the REIT held by it except for providing unit based employee benefits in accordance with this chapter. (3) The units of the REIT transferred to the employee benefit trust shall be locked in by the depository and shall be released by the depository only for the transfer of units to the employees of the manager as per the unit based employee benefit scheme. (4) There shall be a minimum vesting period of one year for unit based employee benefit scheme. (5) The unappropriated inventory of units which are not backed by grants, acquired through secondary acquisition by the employee benefit trust, shall be appropriated within a reasonable period which shall not extend beyond the end of the subsequent financial year, or the second subsequent financial year: Provided that the extension upto the second subsequent financial year shall be subject to the approval of the nomination and remuneration committee of the manager. (6) No unit based employee benefit scheme shall be offered unless the disclosures as specified in Part G of Schedule X of these regulations are made by the manager to the prospective option grantees. (7) The manager implementing unit based employee benefit scheme shall follow the requirements including the disclosure requirements of the Accounting Standards prescribed by the Central Government in terms of section 133 of the Companies Act, 2013 including any 'Guidance Note on Accounting 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 unit based employee benefit scheme based on the units of such REIT. (13) In case of change in manager, the employee benefit trust of the outgoing manager shall sell and/or dispose off he units held by it within six months from the date of change of the manager. ] *************** NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/193 dated 09-07-2024