Investor involvement and the liquidity of such investment vehicles will be enhanced by Market regulator Sebi's significant reduction in the trading lot size of privately set Infrastructure Investment Trusts (InVITs) to Rs 25 lakh. For privately held InVITs, a current trading lot of Rs 1 crore has been allocated for secondary market trading. Furthermore, if the InVIT invests at least 80% of its asset value in completed and income-generating assets, the trading lot is Rs 2 crore.
In its notification on September 26, Sebi stated that the trading lot for trading units on designated stock exchanges would be Rs 25 lakh. The move will make it easier for a larger group of investors to engage in the market and diversify their investment portfolio, thereby enhancing the liquidity of privately placed InVIT units.
In separate notifications, SEBI has revised its rules on infrastructure investment trusts (InVITs) and real estate investment trusts (REITs) to reduce the compliance burden and make it easier to conduct business.
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Accordingly, SEBI has set five business days from the date of announcement of the deadline for REITs and Inviti to receive distributions to unitholders. This is expected to improve the distribution process and help investors obtain funds in a shorter period.
The market regulator has authorized REITs and InVITs to call meetings of unitholders after providing brief notice (less than 21 days) if they consent in writing or electronically. At least 95% of the unitholders' approval will be necessary for an annual meeting, and a majority of the unitholders' approval will be required for any other meeting.
To encourage greater involvement of unitholders in the decision-making process, SEBI stated that for all unitholder meetings, the REIT manager/investment manager of InVIT shall offer unitholders the option to attend the meeting through video conferencing or other visual means.
In addition, unitholders will be given the option to remotely e-vote for all unitholder meetings. For any matter decided at such meeting that requires unitholder approval, the votes cast in favour of the proposal shall represent 50% of the total votes cast for the proposal unless otherwise specified.
SEBI stated that managers and trustees must ensure that adequate backup systems, data storage capacity, and other arrangements for alternative means of communication are in place for records maintained electronically. Additionally, to preserve data and transaction integrity, business continuity plans and disaster recovery spaces must be guaranteed for electronically stored records.
(With Agencies Inputs)