Easing Regulations for REITs and InvITs
- Related Parties Clarification: Units held by related parties of sponsors, investment/project managers will not count as “public” unless they are Qualified Institutional Buyers (QIBs); even then, they remain excluded from the public category.
- Cash Flow Adjustment by HoldCos: HoldCos can now offset their own negative net distributable cash flows against cash received from Special Purpose Vehicles (SPVs) before distributing to REITs/InvITs—subject to disclosures.
- Aligned Reporting Timelines: SEBI has harmonized the submission timelines for quarterly and valuation reports with those for financial results to enhance operational efficiency.
- Primary Market Reforms: Minimum allotment size in the primary market for privately placed InvITs has been reduced from ₹1–25 crore to a uniform ₹25 lakh, aligning with the secondary market.
Relaxations for Merchant Bankers (MBs)
- SEBI revoked its earlier decision (Dec 2024) requiring MBs to hive off non-SEBI-regulated activities into separate entities.
- MBs are now permitted to:
- Engage in activities regulated by other Financial Sector Regulators (FSRs), provided they comply with relevant norms.
- Undertake fee-based, non-fund-based financial services activities not regulated by any FSR, within the same legal entity.
