SEBI amends the Guidelines for Public Issue of Units of REITs

Jan 16, 2019 | by Avantis RegTech Legal Research Team

On January 15, 2019 the Securities Exchange Board of India (SEBI) passed a Circular providing the guidelines for public issue of units of Real Estate Investment Trusts (REITs) with continuation to a Circular passed on December 19, 2016 that is “REIT Guidelines”.

With reference to the sub-clause 2(g) of REIT Guidelines, this Circular provides that only the mutual funds, insurance companies and pension funds which are the associate of merchant bankers or Alternate Investment Funds (AIFs) can apply under Anchor Investor category.

With respect to issue and subscription period under sub-clause 3 of clause 6 of Schedule A of REIT Guidelines, the trust may extend the bidding (issue) period for minimum 3 days and maximum of not exceeding 30 days in case of force majeure, banking strike or similar circumstances.

With respect to price and price band, the managers on behalf of REIT will announce the price band 2 days prior to the opening of the bid instead of 5 days as mentioned in sub-clause (3) of clause 8 of Schedule A of the Guidelines.

This Circular encompasses many changes in sub-clause (1) – (5) of clause 9 of Schedule A of the Guideline. Those are:

·         The trust will only accept the bids only through the Application supported by the Blocked Amount (ASBA) facility for making payments.

·         Investors have to submit bid-cum application form to Self-Certified Syndicate Banks (SCSBs) to subscribe to a public issue. Intermediaries will be responsible for uploading the bid along with other relevant details and submitting the form to SCSBs for blocking of funds.

·         To provide a transparent electronic bidding facility, the stock exchanges have to validate the electronic bid details with depository’s records for DP ID, Client ID and PAN.






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