Market regulator Securities Exchange Board of India i.e. SEBI Board has approved amendments to the Real Estate Investment Trust Regulation (REIT) 2014. This approval has been given to create a new regulatory framework for small and medium REITs. SEBI Chief Madhabi Puri Buch gave this information in the press conference after the SEBI board meeting on Saturday.
After the new rules, to launch REITs, the company should have a minimum asset value of Rs 50 crore. Earlier it was Rs 500 crore. REITs are a company/trust that owns and manages income-generating real estate properties. Investors can buy shares in REITs, and in return, they get a share of the rental income these properties generate.
Simply put, REITs give investors the opportunity to invest and earn money on real estate without owning the physical property. REITs are listed on stock exchanges, making it easier for investors to buy and sell their shares.
REITs raise money from investors and use that money to buy income-generating properties. These properties are then leased to tenants, and the rental income is distributed to investors as dividends. REITs are required to distribute at least 90% of their rental income to investors.
SEBI has also simplified the rules for social stock exchanges. Earlier, a not-for-profit entity like an NGO could raise a minimum of Rs 1 crore. It has now been reduced to Rs 50 lakh. Apart from this, to increase people's participation, the minimum application size has been reduced from Rs 2 lakh to Rs 10,000.
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To raise funds, this entity issues Zero Coupon Zero Principal Bond (ZCZP). It is called ZCZP because there is no interest or principal amount in it. These are entirely for donation. Social Stock Exchange i.e. SSE is a separate segment of the existing stock exchanges. It has been started for social causes.
SEBI Chief Madhabi Puri Buch also said that Same Day Trade Settlement will be implemented in March 2024. A roadmap has been prepared for this. An alternative parallel system is also being created for immediate settlement. That means the money will be credited to the account immediately. This will be implemented till 2025.
The T+1 rule is currently applicable regarding trade settlement. In this, the settlement of deals takes place on the business day i.e. one day after the trading day. That means if you buy any share today, it will be credited to the demat account tomorrow. Similarly, if you sell a share today, the entire amount will be credited to your trading account tomorrow.
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