SEBI has exempted InvITs and REITs from lock-in and allotment restrictions for units issued under unit-based employee benefit (UBEB) schemes, simplifying the process of acquiring and transferring units to employees. Additionally, SEBI has standardized the quarterly reporting format and directed the Bharat InvITs Association and Indian REITs Association to implement uniform compliance templates. These measures aim to enhance transparency, operational efficiency, and consistency across the sectors. By improving processes and ensuring accessible reporting, SEBI's initiatives benefit investors and employees while fostering better compliance and ease of business within the InvIT and REIT ecosystems.
Earlier this month market regulator SEBI, exempted InvITs and REITs from certain lock-in and allotment restrictions when issuing units to an employee benefit trust under unit-based employee benefit (UBEB) schemes. This move is intended to streamline the process of acquiring and distributing units to employees.
SEBI stated in separate circulars that to facilitate the easier acquisition of units by the employee benefit trust and their subsequent transfer to employees in line with the terms of the UBEB scheme, the relevant lock-in and allotment restrictions would not apply to the employee benefit trust. In addition, SEBI has standardised the quarterly reporting format and mandated that the Bharat InvITs Association and Indian REITs Association define a uniform format for quarterly reports and compliance certificates.
These updates are designed to ensure that all InvITs and REITs adhere to a consistent format, which will be publicly accessible on the associations' websites. The goal of these measures is to enhance operational efficiency, transparency, and consistency across the InvIT and REIT sectors. REITs offer investors the opportunity to invest in commercial real estate, while InvITs provide a means of investing in a portfolio of infrastructure assets.
SEBI's recent initiatives reflect a commitment to improving the operational landscape for InvITs and REITs by streamlining processes related to employee unit schemes and enhancing transparency. The exemption from lock-in and allotment restrictions and the standardisation of reporting formats are steps towards greater efficiency and consistency in the sectors. These changes will not only promote ease of business but also ensure better compliance and public access to important information, benefiting both investors and employees in the long run.
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