Sebi invites public comments on proposed amendments to REIT, InvIT rules

Capital markets regulator Sebi on Tuesday said it has sought public views on the proposed amendments to the master circulars for REITs and InvITs.

In a consultation paper, Sebi said these amendments will provide clarity on the nomination rights of directors to the boards of REIT (Real Estate Investment Trusts) and InvIT (Infrastructure Investment Trusts) managers.

In the proposed amendments, the markets watchdog has addressed market participants' requests for clarification on the rights of unitholders to nominate a director to the board of the investment manager or manager of REITs and InvITs.

The changes propose that the restriction on nominating a unitholder nominee director will not apply if the right to appoint a nominee director is available as per the Sebi (Debenture Trustees) regulations.

Under the current norms, a unitholder holding a significant portion of units in an InvIT or REIT has the right to nominate a director, provided their unitholding exceeds a specified threshold.

"It has been represented by market participants to provide clarity on the availability of the right to nominate a director on the Board of Directors of the Investment Manager of InvIT / Manager of REIT, to a unitholder where such nomination right is also available to a unitholder in the capacity of lender to the Investment Manager / Manager or the InvIT/REIT (or its HoldCo(s) or SPVs)," Sebi said.

"...It is proposed to amend the Master Circular for InvITs dated May 15, 2024 and Master Circular for REITs dated May 15, 2024 to provide that the restriction relating to the right to nominate a Unitholder Nominee Director shall not be applicable if the right to appoint a nominee director is available in terms of the Sebi (Debenture Trustees) regulations," it added.

Sebi has invited public comments and suggestions on the draft circulars till July 29.