India’s market regulator, SEBI on 26 September 2014 notified the final rules for setting up of Real Estate Investment Trusts (REITs) Regulations 2014 and Infrastructure Investment Trusts (InvITs) Regulations 2014. The notifications would help in attracting more funds in a transparent manner into the realty and infrastructure sectors.
The notification on REITs has been issued after SEBI in August 2014 said that the REITs should operate with an asset pool of at least 5 billion rupees (81.8 million dollars). It also said that the REITs should have an initial issue size of at least 2.5 billion rupees for shareholders.
The SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) have been notified, vide notification No. LAD-NRO/GN/2014-15/11/1576 and the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“InvIT Regulations”) have been notified, vide a notification No. LAD-NRO/GN/2014-15/10/1577. These two regulations were issued by SEBI in exercise of the powers conferred to it by Section 30 with Section 11 and 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), laying a framework for Real Estate Investment Trusts and registration and regulation as well as Infrastructure Investment Trusts and registration and regulation.
About REITs and InvITs
The REITs and InvITs are listed entities that mainly invest in income-producing assets, the earnings of which are mostly distributed to their shareholders. They generally get special tax treatment.
When: 26 September 2014