July 11, 2024: The Securities and Exchange Board of India (Sebi) has invited public feedback on proposed amendments to the master circulars for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). In a consultation paper, Sebi explained that these changes aim to clarify the nomination rights of directors to the boards of REIT and InvIT managers.
The proposed amendments address market participants’ requests for clarity regarding unitholders’ rights to nominate a director to the board of the investment manager or manager of REITs and InvITs. Specifically, the amendments suggest that the restriction on nominating a unitholder nominee director will not apply if the right to appoint a nominee director is provided under the Sebi (Debenture Trustees) regulations.
Currently, under existing norms, a unitholder who holds a significant portion of units in an InvIT or REIT has the right to nominate a director, provided their unitholding exceeds a specified threshold.
Sebi has opened a public consultation period until July 29, 2024, inviting stakeholders to submit their comments and suggestions. The feedback should be concise and detailed, focusing on the rationale behind each viewpoint. Sebi emphasises that this consultation is not a voting process but an opportunity to gather informed opinions to shape effective policy.
Stakeholders must use Sebi’s web-based form for submitting comments. Detailed instructions include addressing each proposal sequentially, providing clear references to the consultation paper, and avoiding special characters in submissions. Sebi also recommends downloading a PDF backup in case of technical issues during submission.
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