SEBI relaxes minimum shareholding norms for REIT sponsors

“Reducing the lock-in requirements for sponsors and sponsor groups for post-issuance of REITs stake from 25% to 15% is a step in a positive direction by SEBI. We are confident that this will encourage developers and investors to monetize their assets through a REIT structure,” said Kranti Mohan, Partner, Capital Markets, Cyril Amarchand Mangaldas.

In its board meeting held on Friday, the regulator also relaxed OFS norms to allow non-promoters like PE investors to liquidate their holdings. Currently, only those non-promoters are allowed to use the OFS route, who hold a minimum of 10% of the share capital. Going forward, any entity will be allowed to use the OFS route as long as it is offering shares of at least Rs. 25 crores. Also, the cooling off period between two OFS has been reduced from 12 to two weeks.

In an effort to transparency, SEBI has also approved the proposal for Qualified Institutional Placement (QIP) for credit rating agencies to monitor the utilization of issue proceeds raised through preferential issues and exceed the issue size. 100 crores. This will enable the shareholders to know the status of utilization of funds raised by the company, as against the manifest purpose of the funds raised by the issuing company.

The Board has approved a net settlement between the Equity Cash and Derivatives segment. “This will enable investors to use their margins across all segments and reduce the amount of cash that investors need to make,” the regulator said in a 10-page circular on Friday.

The board has also approved a new alternative framework for the appointment and removal of independent directors. At present, to appoint or remove an independent director from the board of a company, a special resolution, requiring 75% of the ‘yes’ votes, is required. Going forward, companies will be allowed to do so through a ‘majority majority’ vote.

The SEBI board also initiated the process of winding up the Clearing Corporation to facilitate the online bond platform.

Accordingly, such platforms should be registered with SEBI as a stockbroker under the debt clause or run by SEBI-registered brokers.

“The objective is to increase the participation of retail investors,” Sebi said.

A procedural circular detailing the specifics and mechanics of operation of online bond platform providers will be issued soon.

SEBI also changed the rules governing alternative investment funds (AIFs) to ensure that asset managers specify the date of closure of the scheme. Currently, it is more open in nature.