Advertisement
Markets regulator SEBI has introduced amendments aimed at harmonising allotment norms for privately placed infrastructure investment trusts (InvITs), streamlining related party classifications, and easing cash flow distribution rules. The minimum allotment lot in the primary market for privately placed InvITs has been brought down to INR 25 lakh, aligning with the secondary market. The regulator has also revised rules for REITs, InvITs, and portfolio managers, focusing on greater transparency, standardised reporting, and improved ease of doing business.
The Securities and Exchange Board of India (SEBI) announced regulatory changes this past week to align allotment and trading rules for privately placed infrastructure investment trusts (InvITs). The minimum allotment lot in the primary market has been reduced to INR 25 lakh, matching the existing secondary market trading lot size. Previously, allotments in the primary market were set at INR 1 crore or INR 25 crore, depending on the underlying asset mix. Advertisement
Through a separate set of notifications issued earlier this month, SEBI also revised regulations governing real estate investment trusts (REITs) and InvITs to improve operational ease. The regulator clarified that related parties of sponsors, investment managers or project managers will not be considered as "public" unless they qualify as institutional buyers. It further stated that even if they are institutional buyers, such related parties will always remain excluded from the "public" category.
This marks a shift from earlier provisions where units held by related parties of sponsors, investment managers or project managers were not counted as public holdings. The amendment now allows classification of units held by related parties that are qualified institutional buyers as public.
SEBI also altered rules relating to cash flow distribution. It indicated that if a holding company records negative net distributable cash flow, it may adjust these against inflows received from its underlying special purpose vehicles (SPVs), provided appropriate disclosures are made to unitholders. Previously, holding companies were mandated to distribute the entire cash flows received from SPVs to InvITs or REITs without adjustments.
Additionally, the regulator has aligned reporting timelines for quarterly submissions, valuation reports, and other disclosures with the timelines for financial results, removing earlier inconsistencies.
Separately, SEBI amended portfolio management rules by simplifying the disclosure process. It specified that portfolio managers must provide clients with a disclosure document, in the prescribed format, along with a certificate in Form C, before entering into any agreement. The disclosure document serves as a comprehensive information guide, enabling investors to make better informed decisions.
By standardising allotment sizes, easing classification of related parties, introducing flexibility in cash flow management, and synchronising reporting timelines, the regulator has moved to reduce complexity and enhance transparency in India's capital markets. The changes are expected to provide operational flexibility while safeguarding investor interests through clearer disclosure requirements.
Source - PTI
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
