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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023

16-Aug-2023 | SEBI/LAD-NRO/GN/2023/144

Securities and Exchange Board of India (SEBI) has issued the Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023, effective from 16th August 2023. Key Highlights of the Amendments: 1. Amendment to Regulation 4: In regulation 4, new provisos have been inserted after the existing non-obstante clause. According to these provisions, unitholders who collectively hold not less than ten percent of the total outstanding units of the Real Estate Investment Trust (REIT) shall be entitled to nominate one director on the board of directors of the Manager. However, the nominated director must recuse from voting on any transaction in which they or their associates are parties. Additionally, any unitholder holding not less than ten percent of the total outstanding units of the REIT must comply with the stewardship code specified in Schedule IX of the regulations. 2. Amendment to Regulation 11: In regulation 11, sub-regulation (3) has been substituted with new provisions. According to these provisions, the sponsor(s) and sponsor group(s) must collectively hold a certain percentage of the total units of the REIT for specific periods: a. Fifteen percent of the total units for three years from the date of listing in the initial offer b. Five percent from the beginning of the fourth year until the end of the fifth year c. Three percent from the beginning of the sixth year until the end of the seventh year d. Two percent from the beginning of the eleventh year until the end of the twentieth year e. One percent after completion of the twentieth year from the date of listing of units issued in the initial offer.

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