The Securities and Exchange Board of India (SEBI) on January 10, 2024, issued the Consultation paper on additional proposals regarding the framework for issuance of subordinate units - REITs and InvITs.
The following has been stated namely: -
• The Objective of the consultation paper is: -
1. Specification of a ceiling on the extent of subordinate units that can be issued
2. Bringing uniformity in the nature of rights conferred on subordinate units
3. Dealing with changes interms and conditions of the subordinate units post-issuance
• Additional Proposals Regarding Framework for Issuance of Subordinate Units have been stated.
• The comments for the following Proposals are invited: -
1. Whether there should be a cap on subordinate units which can be issued by a REIT/InvIT?
2. If the answer to Proposal No. 1 is affirmative, are the proposed caps of ten percent adequate at the asset acquisition level and at the cumulative level in the unit capital of the REIT/InvIT?
3. Whether it should be provided that subordinate units shall only carry inferior voting rights or inferior distribution rights or both?
4. Whether it should be provided that inferior rights on all subordinate units issued by a REIT/InvIT shall be similar i.e. there shall not be multiple classes of subordinate units?
5. Whether it should be provided that inferior rights on subordinate units should be uniform across the industry i.e. uniform inferior rights for all REITs and InvITs? If yes please comment on which option out of (a), (b), and (c) of proposal 3.2.1.4. should be specified to ensure uniformity in the extent of inferior rights offered by REITs and InvITs
6. Whether to provide that no change (except extension in entitlement date) in terms and conditions of the subordinate units post-issuance is permitted?
• The comments/suggestions should be submitted by any of the following modes by January 31, 2024, preferably through an Online web-based form at https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?doPublicComments=yes
• The instructions to submit comments have been stated in the notification.
