New Delhi Capital markets regulator Sebi on Tuesday said it had sought public opinion on the proposed amendments to the master circulars for REITs and InvITs.
In a consultation paper, Sebi said these amendments will provide clarity on the nomination rights of directors to the boards of directors of REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts).
In the proposed amendments, the markets watchdog has addressed requests from market participants for clarification on the rights of unitholders to appoint a director to the board of the investment manager or the manager of REITs and InvITs.
The changes propose that the restriction on nomination of a participating nominee director will not apply if the right to appoint a nominee director is available under the Sebi (Demand Trustees) regulations.
Under current rules, a unitholder who owns a significant portion of the shares in an InvIT or REIT is entitled to appoint a director, provided his shareholding exceeds a specified threshold.
"Has been represented by market participants to provide clarity on the availability of the right to nominate a director on the Board of Directors of the InvIT Investment Manager / REIT Manager, to a unitholder where such nomination right is also available to a participant as a lender to the Investment Manager/Manager or the InvIT/REIT (or its HoldCo(s) or SPV),” Sebi said.
"...it is proposed to amend the InvIT Master Circular dated May 15, 2024 and the REIT Master Circular dated May 15, 2024 to provide that the restriction relating to the right to nominate a Nominee Participating Director will not apply if the right to appoint a nominee director is available in terms of Sebi (Trustee of Debentures) regulations,” he added.
Sebi has invited comments and suggestions from the public on the draft circulars until July 29.
In a consultation paper, Sebi said these amendments will provide clarity on the nomination rights of directors to the boards of directors of REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts).
In the proposed amendments, the markets watchdog has addressed requests from market participants for clarification on the rights of unitholders to appoint a director to the board of the investment manager or the manager of REITs and InvITs.
The changes propose that the restriction on nomination of a participating nominee director will not apply if the right to appoint a nominee director is available under the Sebi (Demand Trustees) regulations.
Under current rules, a unitholder who owns a significant portion of the shares in an InvIT or REIT is entitled to appoint a director, provided his shareholding exceeds a specified threshold.
"Has been represented by market participants to provide clarity on the availability of the right to nominate a director on the Board of Directors of the InvIT Investment Manager / REIT Manager, to a unitholder where such nomination right is also available to a participant as a lender to the Investment Manager/Manager or the InvIT/REIT (or its HoldCo(s) or SPV),” Sebi said.
"...it is proposed to amend the InvIT Master Circular dated May 15, 2024 and the REIT Master Circular dated May 15, 2024 to provide that the restriction relating to the right to nominate a Nominee Participating Director will not apply if the right to appoint a nominee director is available in terms of Sebi (Trustee of Debentures) regulations,” he added.
Sebi has invited comments and suggestions from the public on the draft circulars until July 29.
