Sebi revises REIT, InvIT disclosure guidelines for offer documents
Under the new rules, REITs and InvITs issuing offer documents or follow-on offers must disclose audited financial statements for the last three financial years and a stub period, if applicable, Sebi said in two separate circulars.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
New Delhi: Sebi on Wednesday revised the disclosure requirements for Real Estate Investment Trusts and Infrastructure Investment Trusts , revising norms related to financial information in offer documents and post-listing disclosures.Under the new rules, REITs and InvITs issuing offer documents or follow-on offers must disclose audited financial statements for the last three financial years and a stub period, if applicable, Sebi said in two separate circulars.If the latest audited financials are older than six months from the date of filing, additional stub period financials must be provided. In the case of follow-on offers where the entity has not existed for three years, disclosures must cover the period of existence and the stub period, the regulator said.For initial offers, audited combined financial statements of the REIT and InvIT shall be disclosed in the offer document / placement memorandum.Sebi also specified additional disclosures, which will be included as a part of the audited financial information and shall also be subjected to audit. These include project-wise operating cash flows, contingent liabilities and commitments as of the date of the latest financials.The financial information will be audited by peer-reviewed auditors approved under the REIT and InvIT regulations.These circulars will applicable with immediate effect except for the requirements specified under Chapter 4 which shall be applicable for disclosure of financial information for the period beginning on or after April 1, 2025, Sebi said.On the continuous compliance front, REITs and InvITs are required to submit quarterly and year-to-date financial results within 45 days of quarter-end, except for the final quarter to the stock exchanges.Further, the annual financial results must be submitted within 60 days of the financial year-end, and the final quarter results must reconcile the full-year audited figures with those reported up to the third quarter.Additionally, disclosure of unit holding patterns has also been made more rigorous. REITs and InvITs must report their unit holding pattern one day prior to listing, quarterly within 21 days, and within 10 days of any capital restructuring leading to a change exceeding two per cent in the total outstanding units.Sebi had formed a Working Group for review of compliance requirements for REITs and InvITs, constituted under the aegis of Hybrid Securities and Advisory Committee (HySAC).The regulator issued revised guidelines on the basis of the report of the Working Group.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
2 hours ago
- The Hindu
Consultative regulation-making that should go further
In May this year, the Reserve Bank of India (RBI) issued a policy framework for how it will publish regulations, directions, guidelines and notifications. This follows a similar move by the Securities and Exchange Board of India (SEBI), in February, which published regulations setting out the procedure it would follow to issue regulations. Regulators such as the Reserve Bank of India (RBI) and SEBI, have been created by Acts of Parliament and have quasi-legislative powers. Within this context, strong procedural safeguards and robust checks and balances are essential to uphold the rule of law. The recent frameworks, which outline the procedures that the RBI and SEBI must follow when making law, are a welcome start. When proposing any new regulations or amendment to existing regulations, the RBI will now conduct 'impact analyses' and SEBI will state the 'regulatory intent and objectives'. Both regulators will also invite public comments for 21 days. Moreover, they will now periodically review their own regulations. These reforms signal a welcome shift toward more transparent and consultative regulation-making. Yet, they can, and should go further. Two additions will make these processes more robust, and ensure greater transparency and accountability. First, regulators should clearly identify the economic rationale for their interventions, and second, they should institute mechanisms to ensure accountability for periodic reviews and responses to public comments. The issue of market failure The RBI's impact analyses and SEBI's statements of objectives must be grounded in economic rationale that identifies the problem that their proposed regulation will address. In 2013, the Financial Sector Legislative Reforms Commission (FSLRC) emphasised that 'laws must be defined in terms of their economic purpose'. Regulatory practices in other jurisdictions also support the FSLRC's suggestion. For example, executive memoranda in the United States mandate that regulators undertake a cost-benefit analysis before proposing or adopting a regulation. Regulators there must also ensure the 'least burden on society', adopt an approach that maximises benefits, and assess the feasibility of alternatives to direct regulation. As another example, under the European Union's Better Regulation Framework, impact assessments involve identifying the problem, potential solutions and their impact, and mechanism for monitoring and evaluating the results. Currently, RBI's framework calls for 'impact analysis' considering 'economic environments'. SEBI must explain its objectives. However, neither are explicitly required to provide the economic rationale of any proposed regulation or identify the underlying market failure. This can be contrasted with the framework implemented by the International Financial Services Centres Authority (IFSCA), which must state the issue that its proposed regulation seeks to address. Financial sector regulators such as the RBI and SEBI should: identify the market failure that necessitates regulatory intervention; demonstrate how the proposed regulation will address such failure; conduct a cost-benefit analysis to demonstrate the expected impact of the proposed regulation, and formulate a monitoring and evaluation framework to assess the impact of the regulation. Strengthening accountability The track records of the regulators in consultative regulation-making are not encouraging. It was found by two researchers that between June 2014 and July 2015, the RBI had sought public comments on 2.4% of its circulars while SEBI had done the same on less than half of its regulations. Even though this suggests that there are limited opportunities for stakeholders to submit their views on proposed regulation, one is optimistic that this will now change. However, the regulators must be transparent in their approaches toward consultative regulation-making. The reporting of the following information on an annual basis will strengthen accountability: the number of public consultations vis-à-vis the number of proposed regulations or amendments; responses received; suggestions that have been accepted and rejected; rationale for acceptance and rejection; the impact of public feedback on the proposed regulation or amendment, and, finally, all associated timelines. This is by no means an exhaustive list. Some of this information can be found in the agendas for SEBI's board meetings. But typically, as in SEBI's latest board meeting, the summary of public comments is 'excised for reasons of confidentiality'. In addition, the RBI and SEBI must define the intervals at which they will review their regulations. This is relevant in the context of promises toward deregulation. Once again, this is may be contrasted with the IFSCA's framework, which mandates a review every three years. Regulators should, at pre-defined and reasonably frequent intervals, assess whether current regulations are achieving their intended objectives and addressing the problems they were designed to solve. A hurdle Good regulatory practice warrants meaningful justification for regulatory intervention, and the RBI and SEBI have taken the initial steps in that direction. Notably, limited state capacity is a significant hurdle to implementing regulatory impact assessments and consultative practices. Moreover, piecemeal reforms by individual regulators may not be sufficient to ensure consistent adherence to good regulatory practice. Parliament could contemplate enactment of a law, similar to the Administrative Procedure Act in the United States, with standardised procedures for regulation-making, which includes impact analysis, public consultation and periodic review. The United Kingdom and Canada have issued guidelines for regulation-making by agencies. Such an approach would institutionalise transparency and accountability for all regulators in India. Natasha Aggarwal is a Senior Research Fellow at TrustBridge Rule of Law Foundation. The views expressed are personal
Economic Times
11 hours ago
- Economic Times
Sebi issues correction in IndusInd Bank insider trading case
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Capital markets regulator Sebi has issued a corrigendum to its recent interim order in the IndusInd Bank insider trading case. The market regulator clarified that a key document in its investigation was incorrectly referred to as a 'board note' in the original order but should have been described as an 'engagement note.'In its June 6, 2025, corrigendum, Sebi explained that the term 'board note' will now be read as 'engagement note (signed by the CFO and two senior executives)' in the interim order issued in late regulator had initially stated that KPMG's appointment to review the derivative issues was based on a board note. The corrigendum clarifies that it was actually based on an engagement note — a document typically signed by top company officials but not necessarily a formal board-level insider trading case revolves around allegations that these executives sold shares of IndusInd Bank while in possession of unpublished price-sensitive information (UPSI) regarding significant derivative losses at the to Sebi's order, IndusInd Bank's internal review had identified a negative financial impact of Rs 1,572 crore — approximately 2.35% of its net worth. However, this information was not disclosed to the public until March 10, investigation revealed that Kathpalia and Khurana sold shares — 1.25 lakh and 3.48 lakh, respectively — before the public announcement. By doing so, they avoided losses estimated at nearly Rs 20 has frozen their bank and demat accounts to the extent of the gains and barred them from trading in securities until further notice.
Time of India
11 hours ago
- Time of India
Sebi issues correction in IndusInd Bank insider trading case
Sebi has issued a corrigendum in the IndusInd Bank insider trading case, clarifying that a key document referred to as a 'board note' in its interim order should have been called an 'engagement note.' The case involves allegations of UPSI-based share sales by top executives before disclosing Rs 1,572 crore in derivative losses, helping them avoid nearly Rs 20 crore in losses. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Capital markets regulator Sebi has issued a corrigendum to its recent interim order in the IndusInd Bank insider trading case. The market regulator clarified that a key document in its investigation was incorrectly referred to as a 'board note' in the original order but should have been described as an 'engagement note.'In its June 6, 2025, corrigendum, Sebi explained that the term 'board note' will now be read as 'engagement note (signed by the CFO and two senior executives)' in the interim order issued in late regulator had initially stated that KPMG's appointment to review the derivative issues was based on a board note. The corrigendum clarifies that it was actually based on an engagement note — a document typically signed by top company officials but not necessarily a formal board-level insider trading case revolves around allegations that these executives sold shares of IndusInd Bank while in possession of unpublished price-sensitive information (UPSI) regarding significant derivative losses at the to Sebi's order, IndusInd Bank's internal review had identified a negative financial impact of Rs 1,572 crore — approximately 2.35% of its net worth. However, this information was not disclosed to the public until March 10, investigation revealed that Kathpalia and Khurana sold shares — 1.25 lakh and 3.48 lakh, respectively — before the public announcement. By doing so, they avoided losses estimated at nearly Rs 20 has frozen their bank and demat accounts to the extent of the gains and barred them from trading in securities until further notice.
