New Delhi : To safeguard investors’ interest, new norms for the launch of Real Estate Investment Trusts (REITs) in India will require such bodies to take adequate insurance cover for their realty assets and bar them from promising any guaranteed returns, reports PTI.
The detailed norms, to be made public soon, will also contain strict provisions for any misleading claims and will require them to a strict 10-point code of conduct for fair business practices.
Besides, any change in the sponsor group of these Trusts, which will be listed on stock exchanges and their units can be traded like any other security, would need approval from a vast majority of unit-holders. Failing that, they would need to be given an exit option from the new sponsor.
At the same time, regulator Sebi has decided to keep the disclosure requirements and overall regulatory compliance mechanism simpler for REITs, while registration fees would also be on lower side vis-a-vis other instruments to raise funds from the capital markets.
The new REIT regulations, which were cleared by Sebi’s board on August 10, would be notified soon after necessary fine-tuning, a senior official said.
The new norms would allow formation of REITs to invest largely in completed and income-generating real estate assets and the subsequent listing of such trusts with an initial public offer of at least Rs 250 crore.
