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TMI BlogAmendment to Master Circular for Real Estate Investment Trusts (REITs) dated May 15, 2024X X X X Extracts X X X X X X X X Extracts X X X X ..... d a minimum of 15% of the total units of the REIT, for three years from the date of listing of units in the initial offer. 2. However, Para 10.6.1. of the Master Circular for REITs dated May 15, 2024, dealing with the lock-in requirement applicable at the time of preferential issue of units by a REIT, requires as under: "The units allotted to sponsor(s) and sponsor group shall be locked-in for a period of three years from the date of trading approval granted for the units: Provided that units not more than twenty-five percent of the total unit capital of the REIT shall be locked-in for three years from the date of trading approval: Provided further that units allotted in excess of twenty-five percent of the total unit capital of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that the sponsor(s) and sponsor group(s) shall comply with the minimum unitholding requirement specified in Regulation 11(3) of SEBI (Real Estate Investment Trusts) Regulations, 2014, at all times. 5. Further, based on the request of industry associations and recommendations of HySAC with respect to permitting inter-se transfer of locked-in units among sponsor and sponsor groups, the following provision is inserted as new sub- paragraph under Para 10.6 of the Master Circular for REITs dated May 15, 2024: "10.6.5. Units allotted under a preferential issue to a sponsor or its sponsor group entities which are subject to lock-in, may be transferred among such sponsor or its sponsor group entities, subject to the condition that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EIT Regulations inter-alia provides follow-on offer as one of the mechanism for raising funds subsequent to issue of units after initial public offer and in the manner specified by the Board. 7. Regulation 2(1)(n) of the REIT Regulations defines follow-on offer as under: " "follow-on offer" means offer of units of a listed REIT to the public for subscription and includes an offer for sale of REIT units by an existing unit holder to the public;" 8. It has been represented by the industry associations to provide a regulatory framework for undertaking follow-on offer by a REIT. They have also suggested a framework for undertaking fast track follow-on offer with the aim to make the fund raising more efficient. 9. In order to promote Ease o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Regulations. 2.22. The minimum public unitholding shall be at least twenty-five percent of the total outstanding units of the REIT on post issue basis. 2.23. The provisions of Regulation 15 of the REIT Regulations shall be applicable for follow-on offer document and advertisements in relation to a follow-on offer. 2.24. Allotment and Listing of units: The timelines for allotment and listing of units of REIT shall be as per the timelines specified in case of initial public offer as mentioned in Chapter 2 of the Circular on Master Circular for REITs. 2.25. Payment of interest in case of failure to allot or list units: The provisions specified under sub-regulations (20) and (21) of Regulation 14 of REIT Regulations shall be appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorporating the observations of SEBI, shall be filed with the Board and recognized stock exchanges. 2.29. Submission of due diligence certificate to the Board 2.29.1. The merchant banker shall, along with the filing of the draft follow-on offer document, furnish to the Board, due diligence certificate as per Form A and Form B of Annexure -1 of the Master Circular. 10. This circular shall come into force with immediate effect. 11. This circular is being issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 14(3), 14(11) and 33 of the SEBI (Real Estate Investment Trusts) Regulations, 2014. This circular is issued with the approval of the competent authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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