The Securities Exchange Board of India (“SEBI”) through SEBI (Infrastructure Investment Trusts) (Third Amendment) Regulations, 2023 bearing notification no. SEBI/LAD-NRO/GN/2023/159 (“Notification 1”) and SEBI (Real Estate Investment Trusts) (Third Amendment) Regulations, 2023 bearing notification no. SEBI/LAD-NRO/GN/2023/160 (“Notification 2”) (“Notifications”), dated and in force since October 20, 2023, has amended the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“InvIT Regulations”) and (Real Estate Investment Trusts) Regulations, 2014 (“REITs Regulations”) respectively. The Notifications amended Regulation 18(6) of the InvIT Regulations and Regulation 18(16) of the REITs Regulations.
Regulation 18(6)(e) of the InvIT Regulations and Regulation 18(16)(f) of the REITs Regulations provide that any amount which is unpaid or unclaimed out of the distributions declared by an InvIT/REIT as per Regulation 18, shall be transferred to the Investor Protection and Education Fund (“Fund”) constituted by the SEBI, in such manner as may be specified by the board.
The Notifications inserted a proviso to the above Regulation 18(6)(e) and Regulation 18(16)(f) stating that the amount transferred to such Fund shall not bear any interest. Further, Notification 1 inserted sub-clause (f) in Regulation 18(6) of the InvIT Regulations which provided that the unclaimed or unpaid amount of a person that has been transferred to the Fund in terms of sub-clause (e), may be claimed in such manner as may be specified. Notification 2 also inserted a similar sub-clause (g) in Regulation 18(16) of the REITs Regulations stating the above. This amendment has enabled the unit holders/InvIT/REIT to reclaim the unclaimed or unpaid distribution amount which was previously not provided for.
This update has been contributed by Rachika Agrawal Sahay (Partner) and Sirisha Prasad (Associate).
Argus Knowledge Centre is now on WhatsApp! Send us a message on +91 8433523504 to receive updates from our Knowledge Centre.
11, 1st Floor, Free Press House
215, Nariman Point
Mumbai – 400021
9 – 10 Bahadur Shah Zafar Marg
Delhi – 110002
+91 11 23701284/5/7
155, ESC House, 2nd floor,
Okhla Industrial Estate, Phase 3,
New Delhi – 110020
68 Nandidurga Road
Bengaluru – 560046
3rd Floor, 27B Camac Street
Kolkata – 700016
The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:
a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;
b) you are desirous of obtaining further information about us on your own accord and for your use;
c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;
d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and
e) in cases where the user has any legal issues, the user must seek independent legal advice.