SEBI’s Compliance Rules for REITs and InvITs Unveiled

The Securities and Exchange Board of India (Sebi), the capital markets regulator, has introduced disclosure formats for compliance reports on governance and annual secretarial requirements for emerging investment vehicles such as infrastructure investment trusts (InvITs) and real estate infrastructure trusts (REITs). These formats will be effective from FY24, according to Sebi’s four circulars. According to the new governance report format, InvITs and REITs are required to disclose quarterly information on investment managers’ names, composition of their board of directors, and committee composition. This includes details of board and committee meetings.

Sebi has also issued separate formats for investment managers of InvITs and REITs to submit reports for the respective financial year. Regarding the governance report, investment managers must submit a quarterly compliance report to the stock exchanges within 21 days after each quarter ends. Either the compliance officer or the chief executive officer of the investment manager must sign the report.

For the annual secretarial compliance report, Sebi states that investment managers need to appoint a practicing company secretary on an annual basis to ensure compliance with all applicable rules. The practicing company secretary is then required to submit a report to the investment managers, examining the compliance.

In the format for the annual secretarial compliance report, investment managers are obligated to disclose their compliance with regulatory norms, as well as any deviations and observations.