Consultation paper for amendments to the SEBI (Real Estate Investment Trusts) Regulations, 2014

I. Objective:

1. To solicit the comments/views from public on suggestions pertaining to making amendments / providing clarifications to the SEBI (Real Estate Investment Trusts) Regulations, 2014 (hereinafter referred as “REIT Regulations”).

II. Background:

2. SEBI REIT Regulations were notified on 26th September, 2014, thereby providing a regulatory framework for registration and regulation of REITs in India. The regulations, inter alia, prescribe conditions for making a public offer, initial and continuous disclosures, investment conditions, unit-holder approval requirements, related party disclosures, etc.

3. Pursuant to the notification of REIT regulations, various representations and suggestions have been received from industry bodies and market participants. The representations received have requested changes/clarification to certain provisions of the REIT regulations. Accordingly, certain amendments/clarifications are proposed for the REIT Regulations which are as under.

III.     Proposals for consultation:

4. Removing the restriction on the SPV (only in case of such SPV being a Holding Company) to invest in other SPVs holding the assets.

4.1. Current regulatory requirement:

Regulation 2(1 )(zs) of the REIT Regulations, inter alia, defines a SPV as a company or LLP which holds not less than eighty per cent of its assets directly in properties and does not invest in other special purpose vehicles.

4.2. Request for change:

Allowing the REITs to invest in the Holding Companies (Holdcos) which have investments in other SPVs, which subsequently hold the real estate assets.

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