Sebi Relaxes Rules for REITs

The Securities and Exchange Board of India (Sebi) has relaxed rules on Real Estate Investment Trusts (REITs) by allowing them to invest more in under-construction projects, rationalised unit holder consent on related party transactions and removed restrictions on special purpose vehicle (SPV) to invest in other SPVs holding the assets. REITs are property trusts that pool investor money to invest in office buildings, shopping malls and rental housing.
Industry players said easing of rules will attract real estate developers and funds to launch REITs in India instead of Singapore.
The regulator said it would align the minimum public holding requirement with its listing requirement.
Rationalising the unit holder consent for matters requiring their approval would ease administrative and governance burden under the current regulations and better align these regulations to other public market products like initial public offerings, experts said.
Sebi has proposed to allow REITs to invest up to 20% in under-construction projects from the current 10%, a move that would help the trusts in exploiting developmental potentials in their assets better.

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