Asia Press Agency

Tag: InvITs

  • REITs, InvITs, and Municipal Bonds: Sebi Chairperson’s Insights

    REITs, InvITs, and Municipal Bonds: Sebi Chairperson’s Insights

    In a recent Sebi-NISM Research Conference, Madhabi Puri Buch, the Chairperson of the Securities and Exchange Board of India (Sebi), emphasized the importance of looking at assets such as Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and municipal bonds in a positive light. She highlighted that these structured products play a crucial role in the nation’s growth and economic development.

     

    Buch underscored that the value of these structured products is expected to surpass the current value of goods and services produced by the corporate sector. REITs and InvITs, she explained, serve as investment vehicles that enable developers to monetize revenue-generating real estate and infrastructure assets. This is achieved through the securitization and allocation of units to investors without the physical transfer of assets.

     

    Importantly, Buch emphasized that fractional ownership of real estate and infrastructure will be a significant strength for the country in the future. To facilitate this and lay the groundwork for growth, Sebi has taken proactive initiatives. Buch highlighted the importance of Sebi’s role in providing retail investors with the confidence to invest in these products. She mentioned the governance and disclosure standards of these asset classes, which now provide Sebi with the assurance to recommend them to retail investors.

     

    Additionally, Buch addressed the issue of the high minimum investment price initially associated with these investment products due to their high-risk profile. She stated that Sebi’s objective is to lower the minimum investment threshold for REITs, allowing for smaller units and greater diversity of ownership among Indian citizens.

     

    Sebi has also focused on facilitating innovation and digitization within the ecosystem for these structured products to enhance accessibility for the public. Buch highlighted the regulator’s efforts to ensure that these products are easily accessible and investable for a wide range of investors.

     

    Buch mentioned the growing interest in products like InvITs, particularly among foreign investors. This indicates the potential for these structured products to attract significant investment and contribute to the development of India’s infrastructure and real estate sectors.

     

    Overall, Buch’s remarks underscore the importance of recognizing the value and potential of REITs, InvITs, and municipal bonds in driving economic growth and fostering investment opportunities in India. By promoting these structured products and enhancing regulatory frameworks, Sebi aims to create a conducive environment for investment and development in key sectors of the economy.

  • SEBI Introduces Framework for Handling Unclaimed Funds

    SEBI Introduces Framework for Handling Unclaimed Funds

    The Securities and Exchange Board of India (SEBI), the country’s capital markets regulator, has unveiled a comprehensive framework for addressing unclaimed funds held by entities with listed non-convertible securities, real estate investment trusts (REITs), and infrastructure investment trusts (InvITs). The framework, which also details the process for investors to claim such unclaimed amounts, will be implemented on March 1, 2024.

     

    SEBI’s latest initiative aims to establish a consistent and streamlined procedure for investors to recover unclaimed funds, enhancing their convenience and ease of access. The regulatory move follows SEBI’s approval of rule amendments related to the disclosure of the Investor Protection and Education Fund (IPEF), real estate investment trusts (REITs), and infrastructure investment trusts (InvITs) by SEBI’s board in September.

     

    According to the circulars issued by SEBI, the framework defines the handling of unclaimed funds within REITs, InvITs, and escrow accounts of listed entities (non-corporate). It outlines the transfer of such unclaimed amounts to the Investor Protection and Education Fund (IPEF) and the procedure for investors to claim these funds.

     

    Additionally, SEBI has standardized the processes to be followed by listed entities, REITs, and InvITs for the transfer of unclaimed amounts to escrow accounts. Investors are also provided with guidelines on how to make claims for their unclaimed funds. This standardization promotes a smoother and more efficient experience for investors.

     

    Under the new rule, investors are encouraged to directly approach the debt-listed entity, REIT, or InvIT to claim their unclaimed funds. The framework ensures minimal disruptions in the process, making it easier for investors to recover their unclaimed amounts.

     

    Moreover, the rules stipulate that any unclaimed amount remaining in escrow accounts for a period of seven years will be transferred to the Investor Protection and Education Fund (IPEF). By doing so, SEBI seeks to enhance the protection and education of investors while ensuring that unclaimed funds are handled in a well-defined and structured manner.

     

    SEBI’s proactive approach to unclaimed funds within the capital markets is in line with its commitment to investor protection and regulatory excellence. The framework provides greater clarity and transparency in handling unclaimed amounts, safeguarding the interests of investors in India’s financial markets.