In order to make domestic capital markets more attractive, the Securities and Exchange Board of India (Sebi) has lined up wide-ranging relaxations to its norms for REITs, InvITs and startups, as per the media reports.
Various attempts are being made to garner due attention from business houses in India but all the efforts failed leading to Sebi reconsidering the proposal to give further relaxations, said the PTI report.
Regulator Sebi will consider these regulations in its board meeting next month, according to sources quoted PTI.
Further, a consultation process is already underway for making InvITs (Infrastructure Investment Trusts), REITs (Real Estate Investment Trusts) Regulations and to review the framework for Institutional Trading Platform (ITP) for startups, added the media reports.
Sebi had notified the REIT and InvIT Regulations in 2014, allowing setting up & listing of such Trusts, which are popular in some advanced markets, said the reports.
However, no single Trust has been set up as yet as investors wanted further measures, including tax breaks, to make these instruments more attractive.
While the government provided for certain tax benefits in Budget this year, Sebi has now decided to further relax the rules.
It's board is expected to consider an easy set of norms on REITs and InvITs. It may allow the REITs and InvITs to have up to 5 sponsors, as against the present norm for maximum 3.
AS per the proposal for REITs, the regulator would allow up to 20 per cent investment by such trusts in under-construction projects, up from a maximum of 10 per cent allowed presently.
Besides, relaxations would be made to provisions relating to compliance of minimum public holding norms, as also for investments by the associate entities of the trustees.
The regulator also proposed to rationalise the requirements under the Related Party Transactions, under which 60 per cent unitholders approval apart from related parties, is required for passing a related party transaction.
Further, 75 per cent unitholders approval is required, apart from related parties, for passing special resolutions such as change in investment manager, investment strategy and delisting of units.
As per the proposal for InvITs, Sebi may allow such trusts to invest in 2-level SPV (special purpose vehicle).
It also plans to remove restriction on SPV to invest in other SPVs, thus allowing InvIT to invest in a holding company which subsequently holds stake in SPVs, added the media reports.
Presently, InvIT holds a controlling stake in SPVs that do not invest in other SPVs.
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