(1) The sponsor(s) 68[and sponsor group(s)] shall set up the REIT and appoint the trustee of the REIT.
(2) The sponsor(s) 69[and sponsor group(s)] shall transfer or undertake to transfer, subject to a binding agreement and adequate disclosures in the initial offer 70[document], 71[their] entire shareholding or interest 72[and rights] in the 73[holdco and/or] SPV or entire ownership of the real estate assets to the REIT prior to allotment of units of the REIT to the applicants:
Provided that this shall not apply to the extent of any mandatory holding of shares or interest 74[and rights] in the 75[holdco and/or] SPV by the sponsor(s) 76[and sponsor group(s)] as required 77[under] any Act or regulations or circulars or guidelines of government or regulatory authority as specified from time to time.
(3) With respect to holding of units in the REIT, 78[***]- 67 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 68 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 69 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 70 Word ‘focument’ corrected to read as ‘document’ by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018.
71 Substituted for “its” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 72 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018.
73 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 74 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018.
75 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 76 Inserted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018.
77 Inserted ibid.
78 Omitted“the sponsor(s) shall,” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016.
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(a) 79[the sponsor(s) and sponsor group(s) shall collectively] hold a minimum of twenty five percent. of the total units of the REIT after initial offer on a post-issue basis:
Provided that the minimum sponsor80[(s) and sponsor group(s)] holding specified in this clause shall be held for a period of atleast three years from the date of listing of such units:
Provided further that any holding of the sponsor 81[(s) and sponsor group(s)] exceeding the minimum holding as specified in this clause, shall be held for a period of atleast one year from the date of listing of such units;
(b) 82[the sponsor(s) and sponsor group(s)] together hold not less than fifteen per cent.
of the outstanding units of the listed REIT at all times;
(c) 83[each of the sponsor] individually 84[***] 85[shall] hold not less than five per cent.
of the outstanding units of the listed REIT at all times.
(4) If the sponsor(s) 86[and sponsor group(s)] propose(s) to sell its units below the limit specified in clauses (b) or (c) of sub-regulation (3) of this regulation-
(a) such units shall be sold only after a period of three years from the date of listing of the units;
(b) prior to sale of such units, the sponsor(s) 87[ and sponsor group(s)] shall arrange for another person(s) or entity(ies) to act as the re-designated sponsor(s) where the re-designated sponsor shall satisfy the eligibility norms for the sponsor as specified under 88[regulation 4]:
Provided that such units may also be sold to an existing sponsor;
(c) The 89[***]proposed redesignated sponsor shall obtain approval from the unit holders or provide option to exit to the unit holders in accordance with guidelines as may be specified:
79 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 80 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 81 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 82 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 83 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 84 Omitted“,” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016.
85 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 86 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 87 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 88 Substituted for the word and number “regulation 3” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2017, w.e.f. 15.12.2017 89 Omitted “sponsor/”by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016.
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Provided that this clause shall not apply where the units are proposed to be sold to an existing sponsor90[or member of sponsor group].
(5) If re-designated sponsor(s) propose(s) to sell its units to any another person, conditions specified under clauses (b), and (c) of sub-regulation (4) shall be complied with.
Rights and responsibilities of the valuer.
12. The valuer(s) shall comply with the following conditions at all times-
(a) The valuer(s) shall ensure that the valuation of the REIT assets is impartial, true and fair and is in accordance with regulation 21;
(b) The valuer(s) shall ensure adequate and robust internal controls to ensure the integrity of its valuation reports;
(c) The valuer(s) shall ensure that it has sufficient key personnel with adequate experience and qualification to perform property valuations at all times;
(d) The valuer(s) shall ensure that it has sufficient financial resources to enable it to conduct its business effectively and meet its liabilities;
(e) The valuer(s) and any of its employees involved in valuing of the assets of the REIT, shall not,-
(i) invest in units of the REIT or in the assets being valued; and
(ii) sell the assets or units of REITs held prior to being appointed as the valuer, till the time such person is designated as valuer of such REIT and not less than six months after ceasing to be valuer of the REIT;
(f) The valuer(s) shall conduct the valuation of the REIT assets with transparency and fairness and shall render, at all times, high standards of service, exercise due diligence, ensure proper care and exercise independent professional judgment;
(g) The valuer(s) shall act with independence, objectivity and impartiality in performing the valuation;
90 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 25
(h) The valuer(s) shall discharge its duties towards the REIT in an efficient and competent manner, utilizing his knowledge, skills and experience in best possible way to complete given assignment;
(i) The valuer(s) shall not accept remuneration, in any form, for performing a valuation of the REIT assets from any person other than the REIT or its authorized representative;
(j) The valuer(s) shall before accepting any assignment, 91[from any related party to the REIT, shall] disclose to the REIT any direct or indirect consideration which the valuer may have in respect of such assignment;
(k) The valuer shall disclose to the trustee, any pending business transactions, contracts under negotiation and other arrangements with the manager or any other party whom the REIT is contracting with and any other factors that may interfere with the valuer’s ability to give an independent and professional valuation of the property;
(l) The valuer(s) shall not make false, misleading or exaggerated claims in order to secure assignments;
(m) The valuer(s) shall not provide misleading valuation, either by providing incorrect information or by withholding relevant information;
(n) The valuer(s) shall not accept an assignment that includes reporting of the outcome based on predetermined opinions and conclusions required by the REIT;
(o) The valuer(s) shall, prior to performing a valuation, acquaint itself with all laws or regulations relevant to such valuation.
Rights and responsibilities of the auditor.