SEBI relaxes norms for REITs and InvITs

DELHI, India – The Securities and Exchange Board of India (SEBI) has relaxed its restrictions pertaining to REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) and made an easier set of listing rules for start-ups.

The regulations that will be considered by SEBI during next month’s board meeting was further relaxed after its introduction in August 2015 to encourage start-ups to remain in India and raise funds rather than opting to go abroad. However, in the past one year, no start-up has been listed on the platform.

Although the government provided for tax budgets earlier this year, SEBI has decided to further review and relax the rules. Twenty percent investment by REITs would be allowed in under-construction projects—up by the 10 percent that is currently allowed. Further relaxations would be seen in compliance of minimum public holding norms and investments by associate entities.

SEBI has also decided to ease restrictions on the 201 entities that were barred from the securities markets after it took actions over alleged misuse of the stock market to evade tax and money-laundering activities. These entities will now be allowed to enter into delivery-based cash transactions in NSE Nifty 500 and also sell their securities from their demat accounts.

“I deem it appropriate to make further relaxations so as to address the issues of the personal and business exigencies or other liquidity problems,” SEBI member Rajeev Kumar Agarwal has said.

SEBI was quoted as saying in reports, “…up to 25 percent of the value of the portfolio as one the date of the interim order or the amount in excess of the profit made/loss incurred or value of shares purchase to giver exit, whichever is higher, may be utilised for business purposes and/or for meeting any other exigencies or addressing liquidity problem, etc.”