SEBI Announces Key Amendments to Disclosure Processes for InvITs and REITs

In a significant move to streamline business operations for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs), the Securities and Exchange Board of India (SEBI) has introduced crucial amendments based on recommendations from the working group established by SEBI on ease of doing business measures. This working group was formed to identify and propose measures to improve the ease of doing business in these sectors.

Among the key areas addressed by the working group were the review of statements related to investor complaints and the timeline for disclosing any deviations in the use of proceeds from the stated objectives. These amendments have been formalized through two circulars dated August 22, 2024:

1. ‘Amendment to Master Circular for Infrastructure Investment Trusts (InvITs) dated May 15, 2024 – Review of statement of investor complaints and timeline for disclosure of statement of deviation(s)’ [SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2024/114].
2. ‘Amendment to Master Circular for Real Estate Investment Trusts (REITs) dated May 15, 2024 – Review of statement of investor complaints and timeline for disclosure of statement of deviation(s)’ [SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2024/115].

Previously, the Board of Directors (BOD) of the Investment Manager of InvITs and the Manager of REITs had to review investor complaints before submitting the statement to the stock exchanges. The recent amendments align this process with SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. Now, based on recommendations from the Working Group and the Hybrid Securities Advisory Committee (HySAC), the statement of investor complaints will be reviewed quarterly by both the trustee and the BOD/Governing Body of the Investment Manager of InvITs and the Manager of REITs, eliminating the need for prior review before submission.

Furthermore, SEBI has updated the timeline for submitting statements on deviations from the intended use of proceeds. Previously, these statements had to be submitted within 21 days after the end of each quarter. The amendment now requires that these statements be submitted to the stock exchanges on a quarterly basis along with the financial results, thereby reducing redundancy and making the process more efficient.

These amendments, effective immediately, reflect SEBI’s ongoing efforts to enhance regulatory compliance while promoting ease of doing business for InvITs and REITs.