Markets regulator Sebi on Monday put in place a framework for invocation as well as encumbrance on units of real estate and infrastructure investment trusts.
In a separate circular, Sebi has also extended the regulatory due date for filing and compliance for real estate investment trusts (REITs) and infrastructure investment trusts (InVITs) for the financial year ending March 31, by one month over and above the timeline in the wake of coronavirus pandemic.
In view of developments surrounding the spread of COVID-19, “a need for temporary relaxation in compliance requirements for REIT and InvIT is warranted”, it added. With regard to encumbrance, Sebi said entities required to hold units of REITs and InvITs may create encumbrance on such units during the mandatory holding period wherein encumbrance will include pledge, lien, negative lien, non-disposal undertaking or any other covenant, transaction, condition or arrangement in the nature of encumbrance.
This is subject to the conditions that for creation and invocation of encumbrance are also included in the agreement executed for the purpose of creation of such encumbrance, the Sebi said in two circulars.