SEBI invites public comments on proposed changes to REIT and InvIT regulations

NEW DELHI: Capital markets regulator Sebi on Tuesday said it has sought public views on proposed changes in master circulars for REITs and InvITs.

In a consultation paper, Sebi said these changes will provide clarity on the nomination rights of board members of REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts).

With the proposed amendments, the market regulator responded to requests from market participants to clarify the rights of unitholders to nominate a member of the board of an investment manager or the manager of a REIT or InvIT.

The amendments provide that the restriction on appointment of a nominee director who is a unit holder will not apply if the right to appoint a nominee director is available under the SEBI (Debenture Trustees) regulations.

As per the applicable norms, a unitholder holding a substantial proportion of units in an InvIT or REIT has the right to nominate a director, provided the number of its units exceeds a certain threshold.

“Market participants have provided clarification regarding the availability of the right to nominate a director on the Board of Directors of the Investment Manager of an InvIT/REIT Manager to a unitholder, if such nomination right is also available to a unitholder acting as a lender to the Investment Manager/InvIT/REIT Manager (or its holding companies or special purpose vehicles),” Sebi said.

“It is proposed to amend the Master Circular for InvITs dated May 15, 2024 and the Master Circular for REITs dated May 15, 2024 to provide that the restriction on the right to nominate a Nominee Director being a Unitholder shall not be applicable if the right to nominate a Nominee Director is available under the SEBI (Debenture Trustees) Regulations,” it added.

Sebi invites comments and suggestions on the draft circulars by July 29.