Real Estate Investment Trusts (REITs) are regulated by various regulatory bodies in India. The regulatory guidelines ensure that the interests of investors are protected and the operations of REITs are carried out in a transparent and efficient manner.
- Securities and Exchange Board of India (SEBI)
SEBI is the primary regulator of REITs in India. It regulates the listing and trading of REITs on stock exchanges and ensures compliance with disclosure and reporting norms. Some of the guidelines issued by SEBI for REITs are:
- Minimum asset size of Rs. 500 crore
- Minimum public offer size of 25% of the total units issued
- Mandatory appointment of a sponsor, manager and trustee
- At least two projects to be included in the portfolio at the time of listing
- Reserve Bank of India (RBI)
RBI regulates the funding of REITs and ensures compliance with foreign exchange regulations. Some of the guidelines issued by RBI for REITs are:
- No direct or indirect funding of REITs by overseas branches of Indian banks
- Investment by foreign entities subject to Foreign Exchange Management Act (FEMA) regulations
- Compliance with External Commercial Borrowings (ECB) guidelines for overseas borrowings
- Income Tax Department
Income Tax Department regulates the taxation of REITs and ensures that they comply with the Income Tax Act. Some of the guidelines issued by the Income Tax Department for REITs are:
- Dividend Distribution Tax (DDT) applicable on distribution of income to unitholders
- Capital Gains Tax applicable on transfer of units by unitholders
- Exemption from taxation on rental income received by REITs, subject to compliance with certain conditions
- Registrar of Companies (ROC)
ROC ensures compliance with the Companies Act and other relevant laws by REITs. Some of the guidelines issued by ROC for REITs are:
- Filing of annual returns and other statutory filings with ROC
- Maintenance of proper books of accounts and records
- Disclosure of related party transactions and compliance with related party transaction norms
- Stock Exchanges
Stock exchanges provide a platform for listing and trading of REIT units. Some of the guidelines issued by stock exchanges for REITs are:
- Minimum trading lot size of 100 units
- Minimum free float of 25%
- Disclosure of material events and compliance with continuous disclosure norms
In summary, REITs are regulated by SEBI, RBI, Income Tax Department, ROC and stock exchanges. The regulatory guidelines ensure transparency, investor protection and efficient operation of REITs.