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TMI BlogSecurities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2025X X X X Extracts X X X X X X X X Extracts X X X X ..... ng clause shall be inserted, namely, - "(ga) "common infrastructure" includes facilities or amenities such as power plants, district or retail heating and cooling systems, water treatment or processing plants, waste treatment or processing plants and any facilities or amenities incidental to real estate business which exclusively supply or cater to, or are exclusively consumed by the REIT, its HoldCo(s) or SPV(s), irrespective of whether such facilities or amenities are co-located within any project of REIT or not: Provided that in case of common infrastructure, any excess production or capacity, not consumed by the REIT, its HoldCo(s) or SPV(s), may be sold or supplied to a central or state grid or utility in accordance with the applicable laws, subject to the following conditions: (i) the manager shall make adequate disclosures in the annual report to demonstrate that the excess production or capacity could not be consumed by the REIT, its HoldCo(s) and SPV(s); (ii) the credits or payments received from such sale or supply of excess production or capacity are applied towards the payments to be made by the REIT, its HoldCo(s) or SPV(s); and (iii) the manager shall make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of roles and responsibilities to guide the trustee is specified in Schedule XII; and (b) The trustee shall adopt additional measures or responsibilities crucial for meeting the overarching principles of their role and responsibilities: Provided that this sub-regulation shall come into force on one-hundred eightieth day from the date of publication of the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2025 in the Official Gazette. (20) For the purpose of ensuring compliance with sub-regulation (19), the trustee may engage external consultants during the period of eighteen months from the date of publication of the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2025 in the Official Gazette." (4) in regulation 11, in sub-regulation (3A), the following provisos and explanation shall be inserted, namely, - "Provided that locked-in units held by a sponsor or its sponsor group entities may be transferred only amongst such sponsor or its sponsor group entities subject to the condition that lock-in on such units shall continue for the remaining period with the transferee and such tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged to the REIT and its HoldCo(s) and SPV(s) shall be identical and uniform; and c. appropriate disclosures are made by the REIT in the annual report in this regard. ii. the entire shareholding or interest in such company is held by REIT either directly or through its HoldCo(s) or SPV(s)." (iv) after clause (h), the following clauses shall be inserted, namely, - "(i) units of liquid mutual funds schemes where the credit risk value is at least 12 and which falls under the Class A-I in the potential risk class matrix as specified by the Board. (j) interest rate derivatives, including interest rate futures, forward rate contract and interest rate swap, subject to the following conditions: A. investment in interest rate derivative shall be solely to hedge an underlying interest rate risk in the existing borrowings which qualifies as an effective hedge as per the applicable Indian Accounting Standards; B. that such investment shall only be made as a user or a client of such interest rate derivative, and shall not be in the nature of market making; C. adequate disclosures regarding investment in interest rate derivative shall be made in the annual report; D. for valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther reason, then the resulting vacancy shall be filled at the earliest and not later than three months from the date of such vacancy." (9) in regulation 26H, after clause (a) and before clause (b), the following clauses shall be inserted, namely, - "(aa) "KIS" means Key Information of the Scheme; (ab) "KIT" means Key Information of the Trust;" (10) in regulation 26J, sub-regulation (2), clause (d), sub-clause (iv), (i) the symbol ";" shall be substituted with the symbol ":"; (ii) the word "and" shall be deleted; and (iii) the following proviso shall be inserted - "Provided that if by a vacancy in the office of an independent director of the investment manager, the investment manager becomes non-compliant with the requirement, such vacancy shall be filled by the investment manager as follows: A. if such vacancy arises due to expiry of the term of office of the independent director, then the resulting vacancy shall be filled not later than the date such office is vacated; or B. if such vacancy arises due to any other reason, then the resulting vacancy shall be filled at the earliest and not later than three months from the date of such vacancy." (11) in regulat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations shall be inserted, namely, - "(2A) The scheme offer document shall consist of KIT and KIS. (2B) The investment manager shall file a single draft KIT, common for all schemes, with the Board along with draft KIS at the time of initial offer of the first scheme of the SM REIT and the Board may issue observations on the draft KIT and the draft KIS. (2C) For subsequent scheme offer documents, processing of KIT and KIS shall be done in the following manner - (i) if there is no change in the KIT vis-à-vis the KIT filed with the Board as part of previous scheme offer document and the investment manager has submitted a declaration in this regard, then the KIT shall be filed by the investment manager with the Board only for records along with draft KIS of subsequent schemes and the Board may issue observations only on the draft KIS; or (ii) if there is any change in the draft KIT vis-à-vis the KIT filed with the Board as part of previous scheme offer document, then the investment manager shall file the draft KIT along with the draft KIS of subsequent schemes with the Board and the Board may issue observations on the draft KIT as well as on the draft KIS. " (c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, if any, for facilitating automated supervision and automated processing of data disclosed by the SM REIT schemes and the investment manager as part of continuous disclosure requirements." (14) in regulation 26T, (a) in sub-regulation (2), (i) in the proviso, the symbol "." shall be replaced with the symbol ":"; and (ii) after the proviso, the following proviso shall be inserted, namely - "Provided further that up to five per cent. of the value of the schemes' assets may be invested in interest rate derivatives including interest rate futures, forward rate contract and interest rate swap, subject to the conditions as specified in clause (j) of sub-regulation (5) of regulation 18 of these regulations." iii. after sub-regulation (2) and before sub-regulation (3), the following sub-regulation shall be inserted, namely, - "(2A) The investment conditions specified in sub-regulation (2) of this regulation shall be monitored on a half-yearly basis and at the time of acquisition of an asset: Provided that if such conditions are breached on account of market movements of the price of the underlying assets or securities or change in tenants or expiry of lease or sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as specified in sub-regulation (5) of this regulation are satisfied within six months of such breach." (16) in regulation 26Y, in sub-regulation (1), the words "book building" shall be omitted; (17) in regulation 26Z, after sub-regulation (7), the following sub-regulation shall be inserted, namely, - "(8) The advertisements shall be in accordance with the scheme offer document and any circulars or guidelines as may be specified by the Board in this regard." (18) in regulation 26ZC, after sub-regulation (1) and before sub-regulation (2), the following sub-regulation shall be inserted, namely, - "(1A) In case of oversubscription, the scheme of SM REIT shall not make any allotment in excess of the units offered through the scheme offer document and the allotment of units to each category of investors shall not be less than the minimum bid lot, and the remaining available units, if any, shall be allotted on a proportionate basis (to be selected by a lottery): Provided that in case of oversubscription, an allotment of not more than one per cent. of the net offer to public may be made for the purpose of making allotment in minimum lots;" (19) in regulation 26ZD, after sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er that scheme, ASBA (with reference to Issue Procedure section), clause for General Risks, clause addressing Investment Manager's Absolute Responsibility, proposed stock exchanges for listing and status of in-principle approvals from them, names, contact details and email addresses of registered intermediaries connected to the issue (such as BRLMs, RTA, CRA etc.), proposed issue opening and closing dates, etc. (c) The annotated table of contents shall be added after the cover page. (d) A summary of the scheme of SM REIT in the tabular format mentioned below, covering the following details shall be included after the table of contents: S. No. Particulars Contents 1. Name of the SM REIT 2. Name of the Investment Manager and Trustee 3. Contact details of the Investment Manager 4. Contact details of the Merchant Banker(s) 5. Listing (including name of stock Exchange(s) where it will be listed and timeline for listing) 6. Issue Size 7. Issue Price 8. NAV per unit 9. Minimum Application and in multiples of [●] units thereafter 10. Issue Timing 11. Issue Opening Date &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creation of the SM REIT; c. Registration number and date of registration of the SM REIT with SEBI. 2. Details of parties to the SM REIT a. Investment Manager a. Background of the investment manager including past experience in real estate industry or real estate fund management; In case investment manager is unable to meet the above requirement, details of key managerial personnel who possess not less than five years' experience in real estate industry or real estate fund management; b. Brief functions, duties and responsibilities of the investment manager; c. Brief profiles of the directors of the investment manager and units held by them in the SM REIT, if any b. Trustee a. Background of the trustee including details of registration with SEBI; b. Names and profiles of the Directors; c. Functions, duties and responsibilities of the Trustee. 3. Brief background of the SM REIT a. Glossary of terms and abbreviations (relevant information which is present in the KIT shall be included here); b. Structure and description of the SM REIT (this section shall include details with respect to the structure of the SM REIT and various scheme(s) which it may have from ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (which pertain to all the unitholders of the SM REIT). c. Frequency and manner of meetings of unit holders (for those matters which pertain to all the unitholders of the SM REIT). 10. Litigations and regulatory actions Brief description of the material litigations and regulatory actions which are pending, against the SM REIT, investment manager or any of its associates and the trustee, if any. 11. Risk Factors pertaining to the SM REIT 12. Brief details on taxation and regulatory aspects related to the SM REIT to enable the investors to make an informed decision 13. Other general information a. Key terms of material agreements relating to the SM REIT including but not limited to the investment management agreement, trust deed, tripartite agreements etc. b. Policy of appointment of auditor, information with respect to the auditor and auditing standards to be followed. c. Policy and timelines for redresses of complaints by the investors 14. Supporting Documents a. Auditors report b. Any other such report 15. General Information a. Offer Procedure - Book Building Process or Fixed Price Process b. Information with respect to Bid cum Application Form c. Informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 26ZB of these Regulations); 3. Terms of the Offer a. Terms of the offer for the scheme including number of units, price, offer opening date, offer closing date, terms and conditions and any other information as may be required for the investor to make an informed decision; b. Policy of distribution including method of calculation and the frequency for distribution for the scheme; c. Listing of units: (i) Names of the Stock Exchanges where units are proposed to be listed; (ii) Timelines for listing; (iii) Declaration that prior in-principle approval has been obtained from the Stock Exchanges; d. Eligibility details with respect to the offer made by the scheme of SM REIT shall be included in this section (as required under Regulation 26P(2) of these Regulations). 4. Market overview General overview of the scheme and the micro market where the scheme is targeting its investments (basis location and type of asset). 5. Description of the assets under the scheme of SM REIT a. Description of real estate assets of the scheme of SM REIT including the general character and competitive conditions of all the properties held or intended to be acquired by the scheme of SM REI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny borrowings or deferred payments with respect to the such assets prior to the offer and post-offer; b. Borrowing policy of the assets under the scheme; c. State whether the scheme is with leverage or without leverage in accordance with Regulation 26U(2) of these Regulations. In case of a scheme with no leverage, the investment manager shall submit an undertaking that the particular scheme shall not utilize any leverage in future. 7. Valuation a. Summary of valuation as per the full valuation report; b. Valuation methodology; c. Frequency of valuation and declaration of NAV. 8. Financials a. If discrete financial statements are available for the assets for previous 3 years and stub period (if applicable), then historical financial statements shall be disclosed for last three years and stub period (if applicable) or for such shorter period for which the financial statements are available. b. In case more than one SPV is being acquired under a scheme and discrete financial statements are available for the SPVs, then combined financial statements shall also be disclosed for last three years and stub period (if applicable) or for such shorter period for which the financial s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this section of the KIS. 13. Other general information Key terms of material agreements relating to the assets held under the scheme, such as the property management agreement, shared services agreement etc. 14. Supporting Documents a. Undertaking by the investment manager in case of scheme with no leverage. b. Auditor's report prepared on a standalone basis for each SPV or on combined financial statements, if applicable. c. Any other such report. 15. Offer procedure a. Selling restriction, if any b. Minimum Subscription and Minimum Allotment c. Price Discovery (if applicable) and Allocation d. Basis of allotment e. Timelines for allotment and listing 16. Such other information as is material and appropriate to enable the investors to make an informed decision a. Information with respect to lease rental income for each property proposed to be acquired by the scheme of the SM REIT, along with the comparable lease rental income of other similar properties (such comparable disclosures shall be sourced from or certified by a valuer or any other persons). b. Relevant confirmations with respect to the disclosures included in the KIS shall be included here, as required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) Shareholding of REIT in SPV, HoldCo and Investment entity and changes if any on a quarterly basis; c) Confirmation on compliance with leverage limit on a quarterly basis and at the time of acquisition and disposal of assets; d) Trustee may request for due diligence report or such other information in respect of any acquisition; e) Net worth compliance certificate from manager on a half yearly basis; f) Net worth compliance certificate of sponsor and manager from practicing Chartered Accountant on an annual basis; and g) Confirmation on the details of unclaimed distributions till the previous quarter. iii. The trustee shall ensure that the distribution of net distributable cash flow has been made by the manager in accordance with these regulations and the trust deed. iv. Where the trustee has reason to believe that the conduct of business of the REIT is not in accordance with these regulations they shall forthwith take such remedial steps as are necessary by them and shall immediately inform the unitholders and the Board of the violation and the action taken by them. 3. Managerial Oversight: i. The trustee shall hold annual and as-needed meetings with the manager& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emes of SM REIT; c) ensure that the trust property is properly protected, held and administered by proper persons and by a proper number of such persons; d) ensure that all service providers are holding appropriate registrations from the Board or the concerned regulatory authority; e) arrange for test checks of service contracts; and f) immediately report to the Board of any special developments in the trust. B. Specific due diligence: The trustee shall: a) obtain audit reports of the manager and the REIT, its HoldCos and SPVs at regular intervals from auditors appointed by the manager; b) obtain secretarial compliance reports from the manager; c) consider the reports of the auditor and secretarial compliance reports of REIT at their board meetings for appropriate action; d) review the activity of the REIT on a quarterly basis and place the report of the same before their Board of directors; e) consider the reports of the auditor and compliance reports of manager at their board meetings for appropriate action; f) maintain records and minutes of the Board of directors' meetings of the trustee for the review of information pertaining to the REIT; g) prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30 with effect from August 03, 2021 k. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/100 with effect from November 9, 2022. l. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2023 vide No. LAD-NRO/GN/2023/123 with effect from February 14, 2023. m. Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/137 with effect from July 4, 2023. n. Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023 vide No. LAD-NRO/GN/2023/144 with effect from August 16, 2023. 0. Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/146 with effect from August 18, 2023. p. Securities and Exchange Board of India (Real Estate Investment Trusts) (Third Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/160 with effect from October 23, 2023. q. Securities and Exchang ..... X X X X Extracts X X X X X X X X Extracts X X X X
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