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Capital markets regulator Securities and Exchange Board of India (SEBI) on March 9 prolonged the timeline till March 15, for submission of public comments on a proposal pertaining to larger accountability for sponsors of funding autos — REITs and InvITs.
The regulator had put in place a session paper on holding of sponsors in Real Estate Investment Trust (REITs) and Infrastructure Investment Trust (InvITs) on February 23 and sought public comments on the identical by March 8.
(*15*) the SEBI mentioned in a public discover. In its session paper, the regulator proposed modifications to guidelines governing REITs and InvITs whereby sponsors will probably be required to personal a sure share of items in these funding autos.
The modifications have been proposed holding in thoughts the curiosity of unit holders and the structural vulnerabilities related to absence of a sponsor for REITs and InvITs.
The watchdog recommended that the sponsors of REITs/InvITs ought to maintain 15% of the capital for a interval of three years from the date of itemizing as there isn’t a necessary unit holding requirement after three years.
It was additionally proposed to mandate sponsors to maintain 5% of the unit capital after 3-5 years, 3% from 5-10 years, 2% from 10-20 years and 1% after 20 years.
As per SEBI, the REIT/InvIT business is in a nascent stage and constantly evolving, there’s a want to have at the least one sponsor all through the lifetime of the funding managers. REITs and InvITs are comparatively new funding devices within the Indian context however are extraordinarily standard in world markets.
While a REIT includes a portfolio of economic actual property, a serious portion of which is already leased out, InvITs comprise a portfolio of infrastructure property, resembling highways and energy transmission property.
