Sebi likely to further ease REITs and InvITs norms

Sebi had introduced Real Estate Investment Trusts and Infrastructure Investment Trusts regulations in 2014

The Securities and Exchange Board of India (Sebi) is likely to further relax the rules governing Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) at its board of directors’ meeting on September 23.

“Implementation of norms on REITs and InvITs are dependent on certain tax sops. Some of it was provided in the previous Union Budget. We have received suggestions on making further changes to the regulations. 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,” said U K Sinha, chairman.

Several entities, he said, had approached Sebi with applications to launch REITs and InvITs. Sebi had introduced the regulations on these in 2014.

Sinha also said the measures taken by Sebi on initial public offers (IPO) of equity had yielded good results and the markets could see a record in fund raising this financial year.

“Three years ago, two-thirds of IPOs traded below their issue price on a continuous basis. The stern disclosure requirements by Sebi have given some comfort on pricing. We now have merchant banking track record disclosure requirements, size of the prospectus has been reduced...all these measures have helped,” he said on the sidelines of an event on municipal bonds.

On these bonds, Sinha said local bodies should practise the right accounting norms to improve their credit ratings.

“It is high time we move away from the obsolete accounting system, which municipalities follow. We need to adopt the latest and investor-friendly accounting norms. Sebi will look into any issues and suggestions concerning credit rating of municipal bonds,” he assured.

Municipal bonds are typically issued by urban local bodies to finance infrastructure such as water supply and sanitation.