Source: BS
Context:
The Securities and Exchange Board of India (Sebi) has notified a set of amendments to simplify regulations for Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and portfolio managers, aiming to improve ease of doing business and align primary and secondary market norms.
Key Highlights:
- Minimum Allotment Lot for Privately Placed InvITs
- Reduced to Rs 25 lakh (earlier Rs 1–25 crore depending on asset mix).
- Aligns primary market allotment with the secondary market trading lot size.
- Classification of Related Parties
- Units held by related parties of REIT/InvIT sponsors, investment/project managers not counted as “public” unless they are Qualified Institutional Buyers (QIBs).
- Units held by QIB-related parties now counted as public, enhancing transparency.
- Holdco Cash Flow Adjustments
- Earlier: Holding company had to distribute 100% of SPV cash flows to REIT/InvIT.
- Now: Holdco can offset its own negative cash flows before distribution, with proper disclosure to unitholders.
- Reporting Timelines Harmonization
- Quarterly reports to stock exchanges, trustees, and boards, along with valuation reports, are now aligned with financial results timelines.
- Replaces previous varied schedules.
- Portfolio Manager Disclosure
- Simplified format for disclosure documents.
- Must provide Board-specified format along with Form C certificate before client agreement.
- Ensures clients get essential information for informed investment decisions.
- A Portfolio Manager is a professional or firm responsible for managing investments on behalf of clients.
