Home Acts & Rules SEBI Regulation Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 Chapters List Chapter III RIGHTS AND RESPONSIBILITIES OF PARTIES TO THE REIT, VALUER AND AUDITOR This
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Regulation 11 - Rights and responsibilities of sponsor(s) and sponsor group(s) - Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014Extract Rights and responsibilities of sponsor(s) 1 [and sponsor group(s)]. 11. (1) The sponsor(s) 2 [and sponsor group(s)] shall set up the REIT and appoint the trustee of the REIT. (2) The sponsor(s) 3 [and sponsor group(s)] shall transfer or undertake to transfer, subject to a binding agreement and adequate disclosures in the initial offer 4 [document], 5 [their] entire shareholding or interest 6 [and rights] in the 7 [holdco and/or] SPV or entire ownership of the real estate assets to the REIT prior to allotment of units of the REIT to the applicants: Provided that this shall not apply to the extent of any mandatory holding of shares or interest 8 [and rights] in the 9 [holdco and/or] SPV by the sponsor(s) 10 [and sponsor group(s)] as required 11 [under] any Act or regulations or circulars or guidelines of government or regulatory authority as specified from time to time. 29 [ (3) The sponsor(s) and sponsor group(s) shall collectively hold not less than - (i) fifteen percent of the total units of the REIT, for three years from the date of listing of units in the initial offer: Provided that any holding by the sponsor(s) and sponsor group(s) exceeding fifteen percent shall be held for a period of not less than one year from the date of listing of units issued in the initial offer; (ii) five percent of the total units of the REIT, from the beginning of fourth year and till the end of fifth year from the date of listing of the units issued in the initial offer; (iii) three percent of the total units of the REIT, from the beginning of sixth year and till the end of tenth year from the date of listing of the units issued in the initial offer; (iv) two percent of the total units of the REIT, from the beginning of eleventh year and till the end of twentieth year from the date of listing of the units issued in the initial offer; (v) one percent of the total units of the REIT, after completion of the twentieth year from the date of listing of units issued in the initial offer: Provided that the maximum value of the units to be held by the sponsor(s) and sponsor group(s) for compliance with clauses (ii) to (v) of this sub-regulation shall not exceed five hundred crore rupees or such other value as may be decided by the Board from time to time and such valuation shall be based on the latest available net asset value of the REIT: Provided further that an assessment of compliance of requirements under clauses (ii) to (v) of this sub-regulation shall be done at the time of each fresh issuance of units and at the beginning of change in threshold of the percentage for minimum unitholding requirement as specified in this sub-regulation: Provided further that for REITs that have already issued units pursuant to an initial offer as on the date of coming into effect of the Securities and Exchange Board of India Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023, the provisions contained in clauses (i) to (v) of this sub-regulation shall be applicable only for the additional units issued by the REIT after such date and the units that are locked in at the time of initial offer shall continue to be locked in till the completion of three years from the date of listing of units in such initial offer. ] 30 [ (3A) The units required to be held in terms of sub-regulation (3) shall be locked in and shall not be encumbered: Notwithstanding the above, any encumbrance created on units held to comply with the minimum unit holding requirement applicable before the date of coming into effect of the Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2023, may continue if the encumbrance exist on such date. ] 28 [ (4) Notwithstanding anything contained in any contract or agreement, the sponsor(s) and the sponsor group(s) shall continue to be liable to the REIT, trustees and unit holders for all acts of commission or omission, representation or covenants related to the formation of the REIT and the sale or transfer of assets or holdco or SPV to the REIT. ] 25 [ **** ] 26 [ **** ] ********** 1 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 2 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 3 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 4 Word focument corrected to read as document by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 5 Substituted for its by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 6 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 7 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 8 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 9 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 10 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 11 Inserted ibid. 12 Omitted the sponsor(s) shall, by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016. 13 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 14 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 15 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 16 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 17 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 18 Omitted , by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016. 19 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 20 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 21 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 22 Substituted for the word and number regulation 3 by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2017, w.e.f. 15.12.2017 23 Omitted sponsor/ by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016. 24 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 25. Omitted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as (b) 16 [the sponsor(s) and sponsor group(s)] together hold not less than fifteen per cent. of the outstanding units of the listed REIT at all times; (c) 17 [each of the sponsor] individually 18 [***] 19 [shall] hold not less than five per cent. of the outstanding units of the listed REIT at all times. 26. Omitted vide Notification No. SEBI/LAD-NRO/GN/2020/16 dated 16-06-2020 before it was read as (4) If the sponsor(s) 20 [and sponsor group(s)] propose(s) to sell its units below the limit specified in clauses (b) or (c) of sub-regulation (3) of this regulation- (a) such units shall be sold only after a period of three years from the date of listing of the units; (b) prior to sale of such units, the sponsor(s) 21 [ and sponsor group(s)] shall arrange for another person(s) or entity(ies) to act as the re-designated sponsor(s) where the re-designated sponsor shall satisfy the eligibility norms for the sponsor as specified under 22 [regulation 4]: Provided that such units may also be sold to an existing sponsor; (c) The 23 [***]proposed redesignated sponsor shall obtain approval from the unit holders or provide option to exit to the unit holders in accordance with guidelines as may be specified: Provided that this clause shall not apply where the units are proposed to be sold to an existing sponsor 24 [or member of sponsor group]. (5) If re-designated sponsor(s) propose(s) to sell its units to any another person, conditions specified under clauses (b), and (c) of sub-regulation (4) shall be complied with. 27. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/100 dated 09-11-2022 before it was read as, (3) With respect to holding of units in the REIT, 12 [***]- (a) 13 [the sponsor(s) and sponsor group(s) shall collectively] hold a minimum of twenty five percent. of the total units of the REIT after initial offer on a post-issue basis: Provided that the minimum sponsor 14 [(s) and sponsor group(s)] holding specified in this clause shall be held for a period of atleast three years from the date of listing of such units: Provided further that any holding of the sponsor 15 [(s) and sponsor group(s)] exceeding the minimum holding as specified in this clause, shall be held for a period of atleast one year from the date of listing of such units; 28. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/100 dated 09-11-2022 29. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023 before it was read as, 27 [ (3) The sponsor(s) and sponsor group(s) shall collectively hold a minimum of fifteen percent of the total units of the REIT for a period of at least three years from the date of listing of such units pursuant to initial offer on a post-issue basis: Provided that any holding of the sponsor(s) and sponsor group(s) exceeding the minimum holding, shall be held for a period of atleast one year from the date of listing of such units. ] 30. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/144 dated 16-08-2023
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