Amendments to manner and mechanism of providing exit option to dissenting unit holders pursuant to Regulation 22(6A) and Regulation 22(8) of SEBI (Real Estate Investment Trusts) Regulations, 2014

Last updated: 07 October 2021

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The Securities and Exchange Board of India (SEBI) has issued a circular amending the rules for providing exit options to dissenting unit holders in Real Estate Investment Trusts (REITs). These amendments clarify the 'relevant date' and introduce specific timelines for various activities, including notices, unit holder meetings, and payment of consideration, particularly when an acquisition or change in sponsor is triggered by an open offer. Additionally, the exit option price may be enhanced under certain circumstances.

Securities and Exchange Board of India CIRCULAR SEBI/HO/DDHS/DDHS_Div3/P/CIR/2021/640 October 05, 2021 To All Real Estate Investment Trusts (REITs) All Parties to REITs All Recognised Stock Exchanges All Merchant Bankers Madam/Sir Sub: Amendments to manner and mechanism of providing exit option to dissenting unit holders pursuant to Regulation 22(6A) and Regulation 22(8) of SEBI (Real Estate Investment Trusts) Regulations, 2014 (SEBI (REIT) Regulations) 1. SEBI issuedc

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FAQ :

This circular amends the manner and mechanism for providing an exit option to dissenting unit holders in REITs, as per Regulation 22(6A) and 22(8) of the SEBI (REIT) Regulations, 2014.

The 'relevant date' is now the last day of voting for a resolution. However, if an acquisition or change in sponsor is triggered by an open offer, the relevant date is the date of the public announcement for the acquisition.

The circular outlines specific timelines for the acquirer to notify the manager, for the manager to inform stock exchanges, for unit holder meetings, and for the issuance of the Letter of Offer and payment of consideration to dissenting unit holders.

Yes, in cases where an acquisition or change in sponsor is triggered by an open offer, the exit option price may be enhanced by ten per cent per annum for the period between the first and second notice dates.

The Manager of the REIT is responsible for intimating the outcome of the unit holders' meeting to the Acquirer and stock exchanges, including the number of dissenting unit holders and their unit holdings.