Sebi allows virtual meetings for REITs, InVITs unitholders

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Capital markets regulator Sebi on Friday allowed investment managers of investment vehicles — REITs and InvITs– to conduct meetings of unitholders through video conferencing and other audio-visual means.

The move would allow maximum participation of unitholders in the decision-making process and help in better governance. Under the rules, an annual meeting of all unitholders of real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) need to be held within 120 days from the end of a financial year and the time between two meetings should not exceed 15 months.

Further, managers of such investment instruments are also required to hold meetings of unitholders for certain matters. In two separate circulars, Sebi said it has decided to allow investment managers of REITs and InvITs to conduct meetings of unitholders through video conferencing (VC) and other audio-visual means (OAVM).

For conducting such meetings, they need to comply with the procedure prescribed by the regulator. Among other requirements, recorded transcripts of the meetings held through VC or OAVM should be maintained in the safe custody of the investment managers of InvITs or managers of REITs.

Also, InvITs and REITs are required to upload the transcripts on their respective websites as soon as possible after the conclusion of the meetings. In addition, the convenience of different persons positioned in different time zones need to be kept in mind before scheduling the meeting.

Before the actual date of the meeting, the facility of remote e-voting needs to be provided, among others, Sebi said. The chairperson present at the meeting needs to ensure that the facility of e-voting is available for the purpose of conducting a poll during the meeting held through VC or OAVM on the business to be considered.

Investment managers of REITs and InvITs are required to disclose to the stock exchange and trustee that the meeting of unitholders would be conducted through VC or OAVM. The trustee of these investment vehicles will have to attend meetings of unitholders and monitor such meetings.

REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in the global markets. While an REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, and InvIT consists of a portfolio of infrastructure assets such as highways and power transmission assets.