On 14-2-2023, the Securities and Exchange Board of India (‘SEBI’) notified the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2023 to amend the SEBI (Real Estate Investment Trusts) Regulations, 2014 (‘REIT’). The provisions came into effect on 14-2-2023.
Key Points:
1. The definitions of “Independent director” and “Senior Management” have been inserted.
2. Regulation 10 talks about the rights and responsibilities of a Manager. In the same context, subs- regulation 6A has been inserted which says that the manager of REIT cannot appoint or re-appoint an individual as the auditor for more than 1 term of 5 consecutive years or an audit firm as the auditor for more than 2 terms of 5 consecutive years.
3. In Regulation 13, which talks about the rights and responsibilities of the auditor, a new sub- regulation has been inserted which says that the auditor will have to undertake a limited review of the audit of all the entities or companies whose accounts are to be consolidated with the accounts of the REIT.
4. Regulation 18 lays down the investment conditions and distribution policy whereby a new sub regulation has been inserted stating that in case any amount remains unclaimed or unpaid out of the distributions declared by a REIT will be transferred to “Investor Protection and Education Fund”.
5. Chapter VI A has been inserted which lays down the “Obligations of the Manager”. This chapter lays down the following:
• Reg. 26 A lays down the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which will be applicable as the provisions of these regulations only.
• Reg. 26 B lays down the additional requirements for constituting the Board.
• Reg. 26 C lays down the vigil mechanism which will be formulated by the manager.
• Reg. 26 D lays down that the Secretarial Compliance Report will be submitted by the manager within 60 days from the end of each financial year.
• Reg. 26 E lays down that the Quarterly Compliance Report on governance will also be submitted by the manager within 21 days from the end of each quarter.
6 Schedule VIII has also been inserted which lays down the Governance Norms for:
• Part A- Minimum information to be placed before Board of Directors of the manager
• Part B- Compliance Certificate
*Kriti Kumar, Editorial Assistant has reported this brief.