Sebi Proposes New Regulations to Boost REITs and InvITs

The Securities and Exchange Board of India (Sebi) has proposed regulatory changes for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to enhance business flexibility and protect investors. Key measures include allowing use of interest rate derivatives, easing sponsor unit transfers, and clarifying governance norms.

The Securities and Exchange Board of India (Sebi) has introduced a set of proposed regulations aimed at bolstering the operations of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The proposed changes focus on granting REITs and InvITs the ability to hedge against interest rate fluctuations by utilizing derivatives such as interest rate swaps to protect unitholder interests.

Among the suggestions, Sebi has proposed to allow locked-in units of REITs and InvITs to be transferred among sponsors and their groups, akin to schemes available for promoters of listed companies. This move is intended to assist sponsors in managing their holdings while preserving their commitment to the ventures.

Furthermore, Sebi has suggested amendments for greater transparency in the governance of these trusts. It has been recommended that quarterly reporting should directly reflect the performance of the InvITs themselves, aligning the reporting standards with those of REITs. Sebi has invited public comments on these proposed regulations, with feedback to be submitted by November 13.

(With inputs from agencies.)