The Securities and Exchange Board of India has sought public comments on the proposed amendments to the master circulars for Real Estate Investment Trusts and Infrastructure Investment Trusts, that will provide clarity on the nomination rights of directors to their boards.
The proposed amendments aim to clarify the rights of unitholders regarding nominating a director to the board of the investment manager or manager of REITs and InvITs, addressing requests from market participants.
According to the changes, the restriction on nominating a unitholder nominee director will be lifted if the right to appoint such a director is permitted under the SEBI (Debenture Trustees) regulations.
Under the current norms, a unitholder holding a significant portion of units in an InvIT or REIT has the right to nominate a director, provided their unitholding exceeds a specified threshold.
"It has been represented by market participants to provide clarity on the availability of the right to nominate a director on the Board of Directors of the Investment Manager of InvIT / Manager of REIT, to a unitholder where such nomination right is also available to a unitholder in the capacity of lender to the Investment Manager / Manager or the InvIT/REIT (or its HoldCo(s) or SPVs)," SEBI said.
"...it is proposed to amend the Master Circular for InvITs dated May 15, 2024 and Master Circular for REITs dated May 15, 2024 to provide that the restriction relating to the right to nominate a Unitholder Nominee Director shall not be applicable if the right to appoint a nominee director is available in terms of the Sebi (Debenture Trustees) regulations," it added.
SEBI has invited public comments and suggestions on the draft circulars till July 29.
(With inputs from PTI)
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