Securities and Exchange Board of India (SEBI) has published the “Real Estate Investment Trusts (Third Amendment) Regulations, 2024,” which come into effect on September 26, 2024. The amendment updates the Real Estate Investment Trusts (REITs) regulations first established in 2014. Key changes include the reduction of the timeline for payment distribution to unit holders, requiring it within five working days from the record date, instead of fifteen. It also modifies voting provisions to calculate thresholds based on total votes cast rather than votes against, facilitating smoother unit holder meetings. A provision mandates video conferencing options for meetings and remote electronic voting. Additional regulations ensure that adequate backup systems and data integrity measures are in place for electronically maintained records. Overall, the amendments aim to enhance transparency, efficiency, and accessibility within the REIT framework, aligning with evolving market practices and stakeholder needs.
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 26th September, 2024
(Real Estate Investment Trusts) (Third Amendment) Regulations, 2024
No. SEBI/LAD-NRO/GN/2024/208.—In exercise of the powers conferred under section 30 read with sections 11 and 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014, namely: –
1. These regulations may be called the Securities and Exchange Board of India (Real Estate Investment Trusts) (Third Amendment) Regulations, 2024.
2. They shall come into force on the date of their publication in the Official Gazette:
Provided that sub-regulation (1) of regulation 3 of these regulations shall come into force on the sixtieth day from the date of its publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014, ─
(1) in regulation 18,
(a) in sub-regulation (16),
(i) in clause (c),
A. the words “and made” shall be omitted;
B. the words “not later than fifteen days from the date of such declaration” shall be substituted with the words “within five working days from the record date”;
C. he following shall be inserted as an explanation to clause (c), namely, –
“Explanation. — For the purpose of above clause, record date for the payment of distribution shall be two working days from the date of the declaration of distribution, excluding the date of declaration and the record date.”
(ii) in clause (e) the words “fifteen days of declaration” shall be substituted with the words “the timeline specified in clause (c) of sub-regulation 16”.
(2) in regulation 22,
(a) in sub-regulation (2),
(i) in clause (a), the words “votes cast against” shall be substituted with the words “total votes cast”;
(ii) after clause (a), the following clause shall be inserted, namely, –
“(aa) the voting threshold specified under these regulations shall be calculated on the basis of unit holders present and voting.
Explanation. — The unit holders voting through the electronic voting facility and postal ballot shall be counted for the determination of unit holders present and voting;”
(iii) in clause (c), the symbol “;” shall be substituted with symbol “:” and the following shall be inserted as proviso to clause (c), namely, –
“Provided that a meeting of unit holders may be called after giving shorter notice than that specified in this clause if consent, in writing or by electronic mode, is accorded thereto –
i. in case of an annual meeting, by not less than ninety-five percent of the unit holders entitled to vote thereat; and
ii. in case of any other meeting, by majority of the unitholders in number entitled to vote thereat and who represent not less than ninety-five percent of such part of the units by value as gives a right to vote at the meeting.”
(iv) after clause (e), the following clause shall be inserted, namely, –
“(f) for all unit holder meetings, the manager shall provide an option to the unit holders to attend the meeting through video conferencing or other audio visual means and the option of remote electronic voting in the manner as may be specified by the Board.”
(b) in sub-regulation (4), in clause (b), the words “the votes cast against the resolution” shall be substituted with the words “fifty per cent of the total votes cast for the resolution unless otherwise specified under these regulations.”;
(c) in sub-regulation (5), the words “the votes cast against” shall be substituted with the words “fifty per cent of the total votes cast for”;
(d) in sub-regulation (6), the words “not less than one and half times the votes cast against” shall be substituted with the words “at least sixty per cent of total votes cast for”.
(3) in regulation 26,
(a) in sub-regulation (3) the words “sub-regulation (1) and” shall be inserted between the words “The records specified in” and the words “sub-regulation (2) may be maintained”;
(b) after sub-regulation (3), the following sub-regulations shall be inserted, namely, –
“(4) The manager and the trustee shall ensure that adequate backup systems, data storage capacity, system capacity for secure handling, data transfer and arrangements for alternative means of communication in case of internet link failure, are maintained for the records maintained electronically.
(5) The manager and trustee shall ensure that a business continuity plan and disaster recovery site is in place for the records maintained electronically, to maintain data and transaction integrity.”
(4) in regulation 26ZK, in sub-regulation (1) in clause (d) the words “seven working days of such declaration” shall be substituted with the words “five working days from the record date” and the following shall be inserted as an explanation to clause (d), namely, –
“Explanation. — For the purpose of above clause, record date for the payment of distribution shall be the date which is two working days from the date of the declaration of distribution (excluding the date of declaration and the record date).”
(5) in regulation 26ZM,
(a) in sub-regulation (2),
(i) after clause (a) the following shall be inserted, namely, –
“(aa) the voting threshold specified under these regulations shall be calculated on the basis of unit holders present and voting.
Explanation. — The unit holders voting through the electronic voting facility and postal ballot shall be counted for the determination of unit holders present and voting;”
(ii) in clause (e), the existing proviso shall be substituted with the following proviso, namely, –
“Provided that a meeting of unit holders of each scheme may be called after giving shorter notice than that specified in this clause if consent, in writing or by electronic mode, is accorded thereto –
i. in case of an annual meeting, by not less than ninety-five percent of the unit holders of the scheme entitled to vote thereat; and
ii. in case of any other meeting, by majority of the unitholders of the scheme in number entitled to vote thereat and who represent not less than ninety-five percent of such part of the units of the scheme by value as gives a right to vote at the meeting.”
(iii) after clause (g) the following clause shall be inserted, namely, –
“(h) for all unit holder meetings, the investment manager shall provide an option to the unit holders to attend the meeting through video conferencing or other audio visual means and the option of remote electronic voting in the manner as may be specified by the Board.”
(b) in sub-regulation (7) the words “the votes cast against” shall be substituted with the words “fifty per cent of the total votes cast for”;
(c) in sub-regulation (9), the words “the votes cast against” shall be substituted with the words “fifty per cent of the total votes cast for”;
(d) in sub-regulation (10), the words “not be less than one and a half times the votes cast against” shall be substituted with the words “be at least sixty per cent of the total votes cast for”.
BABITHA RAYUDU, Executive Director
[ADVT.-III/4/Exty./529/2024-25]
Footnotes:
1. The Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 was published in the Gazette of India on September 26, 2014 vide No. LAD-NRO/GN/2014/15/11/1576.
2. The Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 was subsequently amended by the –
a. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2016, vide No. SEBI/LAD/NRO/GN/2016-17/022, with effect from November 30, 2016.
b. Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, vide No. SEBI/LAD/NRO/GN/2016-17/38, with effect from March 6, 2017.
c. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2017, vide No. SEBI/LAD-NRO/GN/2017-18/022, with effect from December 15, 2017.
d. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, vide No. SEBI/LAD-NRO/GN/2018/06, with effect from April 10, 2018.
e. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2019, vide No. SEBI/LAD-NRO/GN/2019/09, with effect from April 22, 2019.
f. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/06, with effect from March 02, 2020.
g. Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/10, with effect from April 17, 2020.
h. Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/16 with effect from June 16, 2020.
i. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/28 with effect from July 30, 2021.
j. Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30 with effect from August 03, 2021.
k. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/100 with effect from November 9, 2022.
l. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2023 vide No. LAD-NRO/GN/2023/123 with effect from February 14, 2023.
m. Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD–NRO/GN/2023/137 with effect from July 4, 2023.
n. Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023 vide No. LAD-NRO/GN/2023/144 with effect from August 16, 2023.
o. Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/146 with effect from August 18, 2023.
p. Securities and Exchange Board of India (Real Estate Investment Trusts) (Third Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/160 with effect from October 23, 2023.
q. Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/166 with effect from March 8, 2024.
r. Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2024 vide No. SEBI/LAD-NRO/GN/2024/193 with effect from July 13, 2024.
