Additions to Compliance Landscape of REIT
Key amendments in REIT Compliances
SEBI vide its notification dated 8th of March, 2024 have notified Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2024. Brief synopsis of additional compliances introduced are as under:
| S. No. | Sub Head | Compliance Description | Periodicity | Effective Date |
| 1 | Other Compliance | Investment manager to abide by the guidelines and circulars issued by the Board in relation to the SCORES and Online Dispute Resolution for resolution of investor grievances and disputes, including depositing such amount with the designated body | On Going | 2024-03-08 |
| 2 | Other Compliance | Approval from the unit holders of the scheme of the SM REIT to be required, where votes cast in favour of the resolution is not be less than one and a half times the votes cast against the resolution in case of the specified items | On Going | 2024-03-08 |
| 3 | Other Compliance | Investment manager to ensure that an annual meeting of unit holders of each scheme is held at least once every year and for which the time between two meetings does not exceed fifteen months | Annually | 2024-03-08 |
| 4 | Other Compliance | Investment manager to be responsible for all the activities pertaining to the meeting of the unit holders of scheme subject to oversight of the trustee (With respect to any matter requiring approval of the unit holders) | On Going | 2024-03-08 |
| 5 | Other Compliance | Investment manager to ensure that no person who is interested in any transaction as well as associates of such person(s) votes on any matter related to that transaction (With respect to any matter requiring approval of the unit holders) | On Going | 2024-03-08 |
| 6 | Other Compliance | Investment manager to provide a notice of not less than twenty one clear days to the unit holders (With respect to any matter requiring approval of the unit holders) | On Going | 2024-03-08 |
| 7 | Other Compliance | Investment manager to provide the option to the unit holders to vote either by way of post or through electronic mode (With respect to any matter requiring approval of the unit holders) | On Going | 2024-03-08 |
| 8 | Other Compliance | Investment manager to ensure that approval from unit holders is required wherein votes cast in favour of the resolution is at least three times the number of votes cast, against the resolution in case the scheme of the SM REIT proposes to purchase a property or proposes to sell a property at a value which is greater than one hundred and five per cent. or less than ninety five per cent. of the value of property (With respect to any matter requiring approval of the unit holders) | On Going | 2024-03-08 |
| 9 | Other Compliance | Investment manager to ensure that the unit holders of the scheme have the right to vote in any unit holders meeting of that particular scheme of SM REIT (With respect to any matter requiring approval of the unit holders) | On Going | 2024-03-08 |
| 10 | Other Compliance | Investment manager to ensure that a resolution is considered as passed when the votes cast by unit holders, so entitled and voting, in favour of the resolution exceed a certain percentage or criteria as specified in these regulations (With respect to any matter requiring approval of the unit holders) | On Going | 2024-03-08 |
| 11 | Other Compliance | Investment manager to ensure that SM REITs does not enter into any transaction with related parties including transactions for facility management and property management | On Going | 2024-03-08 |
| 12 | Other Compliance | Investment manager to ensure that the distributions are paid to the unit holders within seven working days of such declaration (in respect to distributions made by the scheme of SM REIT and SPV) | Event Based | 2024-03-08 |
| 13 | Other Compliance | Investment manager to ensure that the distributions are declared at least once in every quarter of the financial year (in respect to distributions made by the scheme of SM REIT and SPV) | Event Based | 2024-03-08 |
| 14 | Other Compliance | Investment manager to ensure that hundred per cent. of the net distributable cash flows of the scheme of SM REIT is distributed to the unit holders (in respect to distributions made by the scheme of SM REIT and SPV) | On Going | 2024-03-08 |
| 15 | Other Compliance | Investment manager to ensure that not less than ninety-five per cent. of net distributable cash flows of the SPV are distributed to the scheme of SM REIT subject to applicable provisions in the Companies Act, 2013 (in respect to distributions made by the scheme of SM REIT and SPV) | On Going | 2024-03-08 |
| 16 | Other Compliance | Investment manager to ensure that the valuer does not value any assets, which it has valued within the preceding twelve months prior to the acquisition of the asset by the scheme of the SM REIT | On Going | 2024-03-08 |
| 17 | Other Compliance | Investment manager to require the valuer to undertake a full comprehensive valuation of that property in case of purchase of a new property or sale of an existing property | On Going | 2024-03-08 |
| 18 | Other Compliance | Investment manager to ensure that no valuer undertakes valuation of the properties of the schemes of the SM REIT for more than four years consecutively | On Going | 2024-03-08 |
| 19 | Other Compliance | Investment manager to require the valuer to undertake full valuation of the particular scheme of SM REIT assets and include a summary of the report in the scheme offer document | Event Based | 2024-03-08 |
| 20 | Other Compliance | Investment manager to submit the valuation reports to the trustee, designated stock exchanges and unit holders within one working day from the receipt of such valuation reports | Event Based | 2024-03-08 |
| 21 | Other Compliance | Investment manager to ensure that the net asset value of each scheme is required to be declared and disclosed to the recognized stock exchanges based on the latest valuation report as on March 31st | On Going | 2024-03-08 |
| 22 | Other Compliance | Investment manager to ensure that the valuer, for the purposes of the valuation, undertakes a full comprehensive valuation of all assets which includes physical inspection of each property of the scheme | On Going | 2024-03-08 |
| 23 | Other Compliance | Investment manager to ensure that the valuer is not an associate of the investment manager or trustee of the SM REIT and that the signatory to the valuation reports has at least five years of experience in valuation of real estate | On Going | 2024-03-08 |
| 24 | Other Compliance | Valuer carrying out a comprehensive valuation of the assets of each scheme of the SM REIT on an annual basis to submit its report to the investment manager | Annually | 2024-03-08 |
| 25 | Other Compliance | Investment manager to ensure that valuer carries out the full comprehensive valuation of the assets of each scheme of the SM REIT on an annual basis | On Going | 2024-03-08 |
| 26 | Registration(s)/Approval(s)/Clearance(s)/License(s) | Investment manager to apply for delisting of units of the scheme of the SM REIT to the Board and the designated stock exchanges | One Time | 2024-03-08 |
| 27 | Registration(s)/Approval(s)/Clearance(s)/License(s) | Investment manager to apply for delisting of units of the scheme of the SM REIT to the Board and the designated stock exchanges | One Time | 2024-03-08 |
| 28 | Other Compliance | Post-issue merchant banker(s) to continue to be responsible for post-issue activities till the subscribers have received credit to their demat account or refund of application moneys and the listing agreement is entered into by the SM REIT with the designated stock exchange | On Going | 2024-03-08 |
| 29 | Other Compliance | Post-issue merchant banker(s) to ensure that SM REIT, its advisors and brokers, and other persons connected with the issue do not publish any advertisement stating that issue has been oversubscribed or indicating investors response to the issue, during the period when the public issue is still open for subscription by the public | On Going | 2024-03-08 |
| 30 | Other Compliance | Post-issue merchant banker(s) to release advertisement giving details relating to oversubscription, basis of allotment, number, value and percentage of all applications, number, value and percentage of successful allottees for all applications, date of completion of dispatch of refund orders or instructions to Self-Certified Syndicate Banks by the Registrar, date of dispatch of certificates and date of filing of listing application in all the newspapers in which the pre-issue advertisement was released | Event Based | 2024-03-08 |
| 31 | Display Compliance | Post-issue merchant banker(s) to release advertisement giving details relating to oversubscription, basis of allotment, number, value and percentage of all applications, number, value and percentage of successful allottees for all applications, date of completion of dispatch of refund orders or instructions to Self-Certified Syndicate Banks by the Registrar, date of dispatch of certificates and date of filing of listing application on the websites of the SM REIT and designated stock exchanges | Event Based | 2024-03-08 |
| 32 | Other Compliance | Post-issue merchant banker(s) to regularly monitor redressal of investor grievances relating to post-issue activities such as allotment, refund, etc. | On Going | 2024-03-08 |
| 33 | Other Compliance | Obligations of the post-issue merchant banker(s) with respect to all matters relating to post-issue, including refund, allotment, payment of interest to applicants in case of delayed allotment or refund to be as per the disclosure in the scheme offer document | On Going | 2024-03-08 |
| 34 | Records/Registers | Merchant banker(s) and other intermediaries associated in the book building process to maintain records of the book building process | On Going | 2024-03-08 |
| 35 | Records/Registers | Merchant banker to maintain a final book of demand showing the result of the allocation process | On Going | 2024-03-08 |
| 36 | Other Compliance | Minimum offer and allotment to the public in each scheme of SM REIT to be at least twenty-five per cent. of the total outstanding units of such scheme | On Going | 2024-03-08 |
| 37 | Intimations | Merchant banker to submit post-issue report, along with due diligence certificate | Event Based | 2024-03-08 |
| 38 | Other Compliance | Investment manager to ensure that no person, other than investment manager, its related parties and its associates holds units of a scheme of the SM REIT which taken together with units held by him and by persons acting in concert with him in such scheme of the SM REIT, exceed twenty-five per cent of the total outstanding units of such scheme of the SM REIT | On Going | 2024-03-08 |
| 39 | Other Compliance | Investment manager to ensure that the units of the scheme of the SM REIT listed in designated stock exchanges is traded, cleared and settled in accordance with the bye-laws of concerned stock exchanges | On Going | 2024-03-08 |
| 40 | Other Compliance | Investment manager to ensure that the units of the scheme of the SM REIT is mandatorily listed on the recognized stock exchange(s) having nationwide trading terminals |
On Going | 2024-03-08 |
| 41 | Other Compliance | Investment manager on behalf of the scheme of the SM REIT to allot the units to the applicants on receipt of the sum payable on application | On Going | 2024-03-08 |
| 42 | Other Compliance | Investment manager to hold at least one per cent. of the total outstanding units in each scheme of the SM REIT, at all times, after the completion of twentieth year from the date of listing of units issued in the initial offer | On Going | 2024-03-08 |
| 43 | Other Compliance | Investment manager to hold at least two per cent. of the total outstanding units in each scheme of the SM REIT, at all times, for a period of ten years commencing from the eleventh year of the date of listing of units in the initial offer till the end of twentieth year from the date of listing of units issued in the initial offer | On Going | 2024-03-08 |
| 44 | Other Compliance | Investment manager to hold at least three per cent. of the total outstanding units in each scheme of the SM REIT, at all times, for a period of five years commencing from the sixth year of the date of listing of units in the initial offer till the end of tenth year from the date of listing of units issued in the initial offer | On Going | 2024-03-08 |
| 45 | Other Compliance | Investment manager to hold at least five per cent. of the total outstanding units in each scheme of the SM REIT, at all times, for a period of two years commencing from the fourth year of the date of listing of units in the initial offer till the end of fifth year from the date of listing of units issued in the initial offer | On Going | 2024-03-08 |
| 46 | Other Compliance | Investment manager to hold at least fifteen per cent. of the total outstanding units at all times in a scheme of the SM REIT which has opted to undertake leverage as per disclosures in the scheme offer document filed for initial offer | On Going | 2024-03-08 |
| 47 | Other Compliance | Investment manager to hold at least five per cent. of the total outstanding units at all times in a scheme of the SM REIT which has opted not to undertake leverage as per disclosures in the scheme offer document filed for initial offer | On Going | 2024-03-08 |
| 48 | Other Compliance | Prohibition on payment of incentives | On Going | 2024-03-08 |
| 49 | Other Compliance | Investment manager to ensure that no public communication contains any offer of incentives, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise | On Going | 2024-03-08 |
| 50 | Other Compliance | Investment manager to ensure that no public communication issued during the issue period gives any impression that the issue has been fully subscribed or oversubscribed | On Going | 2024-03-08 |
| 51 | Other Compliance | Investment manager on behalf of the scheme of the SM REIT to obtain approval from the merchant bankers responsible for marketing the issue In respect of all public communications | On Going | 2024-03-08 |
| 52 | Other Compliance | Investment manager on behalf of the SM REIT to make prompt, true and fair disclosure of all developments taking place between the date of filing scheme offer document with the Board and the date of allotment of units which have a material effect on the scheme of the SM REIT, by issuing public notices in all the newspapers in which the pre-issue advertisement was released | On Going | 2024-03-08 |
| 53 | Display Compliance | Investment manager on behalf of the SM REIT to make prompt, true and fair disclosure of all developments taking place between the date of filing scheme offer document with the Board and the date of allotment of units which have a material effect on the scheme of the SM REIT, by issuing public notices on the website of the SM REIT and designated stock exchanges | On Going | 2024-03-08 |
| 54 | Other Compliance | Investment manager to ensure that public communication including advertisement, publicity material, research reports, etc. concerned with the issue is not misleading and does not contain any matter extraneous to the contents of the scheme offer document | On Going | 2024-03-08 |
| 55 | Other Compliance | SM REIT to issue an advertisement pertaining to the issue of units of a scheme | On Going | 2024-03-08 |
| 56 | Other Compliance | Investment manager to ensure that the minimum subscription amount from any investor in any offer is rupees ten lakhs | On Going | 2024-03-08 |
| 57 | Display Compliance | Investment manager of the SM REIT to provide the web-link of the platform of the designated stock exchange for subscription of units of the scheme of the SM REIT, on the website of SM REIT | On Going | 2024-03-08 |
| 58 | Other Compliance | Investment manager of the SM REIT to use the book building platform of designated stock exchange to accept bids from investors for units of the scheme of the SM REIT | On Going | 2024-03-08 |
| 59 | Other Compliance | Investment manager to ensure that the investments of scheme of the SM REIT in SPV(s) is held in dematerialized form | On Going | 2024-03-08 |
| 60 | Other Compliance | Investment manager to ensure that the SM REIT issues the units of its scheme only in dematerialized form | On Going | 2024-03-08 |
| 61 | Other Compliance | Issue period for units of its scheme not to be more than thirty days | On Going | 2024-03-08 |
| 62 | Other Compliance | Investment manager to ensure that no links or information about any other entity, structure or person is made available on its website or on any other medium of communication | On Going | 2024-03-08 |
| 63 | Other Compliance | Investment manager to ensure that the trademark, brand name, website and other medium of communication of the SM REIT are used exclusively for the activities of SM REIT | On Going | 2024-03-08 |
| 64 | Display Compliance | Investment manager to provide the link to the scheme offer document for the investors on the website of the SM REIT | On Going | 2024-03-08 |
| 65 | Display Compliance | Investment manager to specify on the website, the details of all the schemes of the SM REIT and details of the real estate assets and properties proposed to be acquired or acquired and held under each scheme | On Going | 2024-03-08 |
| 66 | Other Compliance | Investment manager to maintain a functioning website of SM REIT at all times | On Going | 2024-03-08 |
| 67 | Other Compliance | Modes of fund raising by SM REIT | On Going | 2024-03-08 |
| 68 | Other Compliance | Special purpose vehicle (SPV) to ensure that the scheme of SM REIT is not permitted to lend to any entity other than lending to its own SPV | On Going | 2024-03-08 |
| 69 | Other Compliance | Special purpose vehicle (SPV) to ensure that scheme of the SM REIT invests at least ninety-five per cent. of the value of the schemes assets for each of its schemes in completed and revenue generating properties | On Going | 2024-03-08 |
| 70 | Other Compliance | Special purpose vehicle (SPV) to directly and solely own all assets that are acquired or proposed to be acquired by the scheme of the SM REIT, of which SPV is the wholly owned subsidiary | On Going | 2024-03-08 |
| 71 | Display Compliance | Investment manager to ensure that the draft scheme offer document is made public for comments for a period of not less than twenty-one days by hosting it on the websites of the Board, designated stock exchanges and merchant bankers associated with the issue | On Going | 2024-03-08 |
| 72 | Other Compliance | Trustee to annually inspect the property documents evidencing the title to the real estate assets or properties along with the related papers maintained in safe-deposit boxes at a scheduled commercial bank | Event Based | 2024-03-08 |
| 73 | Records/
Registers |
Investment manager and the trustee to ensure that the property documents evidencing the title to the real estate assets or properties along with the related papers is duly maintained in safe-deposit boxes, at a scheduled commercial bank | On Going | 2024-03-08 |