Sebi likely to further relax REITs and InvITs norms

With an aim to give capital markets a big push, regulator Sebi is likely to ease out regulations for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), this month.   Sebi had introduced Real Estate Investment Trusts and Infrastructure Investment Trusts regulations in 2014.The Securities and Exchange Board of India is likely to further ease the rules governing Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) at its board of directors’ meeting on September 23.   "We are likely to take a call in our board meeting this month. I am very optimistic that REITs and InvITs will take off this year," Sebi chairman U K Sinha told reporters on the sidelines of a conference on municipal bonds.   The move is being taken after Sebi received suggestions to change these norms.   Noting that multiple applications have been received for registration for REITs and InvITs, the Sebi chairman also said these investment vehicles are expected to take off this year.   Sebi had come out with regulations for REITs and InvITs in 2014. However, single trust has been set up as yet as investors wanted further measures, including tax breaks, to make these instruments more attractive.   While the government provided for certain tax benefits in the Budget this year, the Sebi has now decided to further relax the rules.   Among others, Sebi's board is expected to consider an easier set of norms on REITs and InvITs. It may allow the REITs and InvITs to have up to five sponsors, as against the current norm for maximum three.   Under the proposal for REITs, Sebi may allow up to 20% investment by such trusts in under-construction projects, up from a maximum of 10% allowed currently.

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