Sebi lays down framework for calculation of Net Distributable Cash Flows

Sebi said that the option to retain 10% distribution needs to be computed by taking together the retention done at SPV level and Trust level

To promote ease of doing business, capital markets regulator Sebi on Wednesday decided to standardise the framework for calculation of available net distributable cash flows by REITs, InvITs and their respective holding companies.

The new framework will be applicable from April 1, 2024, the Securities and Exchange Board of India (Sebi) said in two separate circulars.

Under the rules, the Net Distributable Cash Flow (NDCF) is computed at the level of real estate investment trusts (REITs), and infrastructure investment trusts (InvITs) and their holding companies (HoldCo) or special purpose vehicles (SPVs).

Further, the minimum distribution should be 90 per cent of the NDFC at the Trust level as well as the HoldCo/SPV level. This is subject to applicable provisions in the Companies Act or the Limited Liability Partnership Act.

Sebi said that the option to retain 10 per cent distribution needs to be computed by taking together the retention done at SPV level and Trust level.

"Further, Trust along with its SPVs needs to ensure that minimum 90 per cent distribution of NDCF be met for a given financial year on a cumulative periodic basis," the regulator said.

Similarly, any restricted cash should not be considered for NDCF computation by the SPV or InvIT.

Last month, Sebi came out with detailed procedures for dealing with unclaimed funds of investors lying with entities having listed non-convertible securities, REITs and InvITs.