SEBI Simplifies Rules for REITs, InvITs, and Merchant Bankers
SEBI has introduced significant changes. These updates aim to simplify processes for Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and merchant bankers.
Major Updates for REITs and InvITs
Here are the key changes:
- Public Unitholding Definition: Units held by related parties, even if they are Qualified Institutional Buyers (QIBs), will not be considered public.
- Cash Flow Flexibility: Holding Companies (HoldCos) can now balance negative cash flows from their operations with cash inflows from special purpose vehicles (SPVs).
- Aligned Reporting Timelines: The schedule for submitting various reports now matches the timeline for financial results.
- Lower Minimum Investment: The minimum allotment size for privately placed InvITs has been reduced to Rs 25 lakh, making it more accessible for investors.
Increased Flexibility for Merchant Bankers
SEBI has also updated rules for merchant bankers. They can now offer certain non-SEBI-regulated financial services under the same legal entity, subject to conditions:
- If another financial regulator oversees the activity, compliance with that regulator’s framework is required.
- If the activity is not regulated by SEBI or any other financial regulator, it must be fee-based, non-fund-based, and directly related to financial services.
These updates aim to streamline operations and reduce costs for merchant bankers while maintaining strong regulatory oversight.
What’s Next?
The changes to the REITs Regulations, InvITs Regulations, and Merchant Bankers Regulations were approved during SEBI’s board meeting. Official notifications will be issued soon.
