Section 4 in Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014
4. Eligibility criteria.
(1)For the purpose of the grant of certificate to [the trust] [Substituted 'an applicant' by Notification No. SEBI/LAD-NRO/GN/2018/06, dated 10.4.2018 (w.e.f. 29.9.2014).], the Board shall consider all matters relevant to the activities as a REIT.(2)Without prejudice to the generality of the foregoing provision, the Board shall consider the following, namely, -(a)the applicant is [the sponsor on behalf of] [Substituted 'a' by Notification No. SEBI/L.A.D.-NRO/GN/2016-17/022, dated 29.11.2016 (w.e.f. 26.9.2014).] trust and the instrument of trust is in the form of a deed duly registered in India under the provisions of the Registration Act, 1908;(b)the trust deed has its main objective as undertaking activity of REIT in accordance with these regulations and includes responsibilities of the Trustee in accordance with Regulation 9;(c)persons have been designated as sponsor(s), manager and trustee under these regulations and all such persons are separate entities;(d)with regard to sponsor(s),-(i)[each sponsor shall hold or propose] [Substituted 'there are not more than three sponsors each holding or proposing' by Notification No. SEBI/L.A.D.-NRO/GN/2016-17/022, dated 29.11.2016 (w.e.f. 26.9.2014).] to hold not less than five per cent. of the number of units of the REIT on post-initial offer basis;(ia)[ each sponsor and sponsor group shall be clearly identified in the application of registration to the Board and in the offer document/placement memorandum, as applicable: [Inserted by Notification No. SEBI/L.A.D.-NRO/GN/2016-17/022, dated 29.11.2016 (w.e.f. 26.9.2014).]Provided that, for each sponsor group not less than one person shall be identified as a sponsor;][Provided further that, of the entities categorized as sponsor group, only the following entities may be considered:(a)a person or entity who is directly or indirectly holding an interest or shareholding in any of the assets or SPVs or holdcos proposed to be transferred to the REIT.(b)a person or entity who is directly or indirectly holding units of the REIT on postissue basis.(c)a person or entity whose experience is being utilized by the sponsor for meeting with the eligibility conditions required under sub-clause (iii) of clause (d) of sub-regulation (2) of regulation 4 of these regulations.](ii)the sponsor(s), on a collective basis, have a net worth of not less than one hundred crore rupees:Provided that each sponsor has a net worth of not less than twenty crore rupees; and(iii)the sponsor or its associate (s) has not less than five years experience in development of real estate or fund management in the real estate industry:Provided that where the sponsor is a developer, at least two projects of the sponsor have been completed;(e)with regard to the manager,-(i)the manager has a net worth of not less than ten crore rupees if the manager is a body corporate or a company or net tangible assets of value not less than ten crore rupees in case the manager is a LLP;(ii)the manager or its associate has not less than five years experience in fund management or advisory services or property management in the real estate industry or in development of real estate;(iii)the manager has not less than two key personnel who each have not less than five years experience in fund management or advisory services or property management in the real estate industry or in development of real estate;(iv)the manager has not less than half, of its directors in the case of a company or of members of the governing Board in case of an LLP, as independent and not directors or members of the governing Board [of the manager] [Inserted by Notification No. SEBI/LAD-NRO/GN/2018/06, dated 10.4.2018 (w.e.f. 29.9.2014).] of another REIT; and(v)the manager has entered into an investment management agreement with the trustee which provides for the responsibilities of the manager in accordance with regulation 10;(f)with regard to the trustee,-(i)the trustee is registered with the Board under SEBI(Debenture Trustees) Regulations, 1993 and is not an associate of the sponsor (s) or manager; and(ii)the trustee has such wherewithal with respect to infrastructure, personnel, etc. to the satisfaction of the Board and in accordance with circulars or guidelines as may be specified by the Board;(g)no unit holder of the REIT enjoys [superior] [Substituted 'preferential' by Notification No. SEBI/L.A.D.-NRO/GN/2016-17/022, dated 29.11.2016 (w.e.f. 26.9.2014).] voting or any other rights over another unit holder [and there are no multiple classes of units of REIT:] [Substituted ';' by Notification No. SEBI/L.A.D.-NRO/GN/2016-17/022, dated 29.11.2016 (w.e.f. 26.9.2014).][Notwithstanding the above, subordinate units may be issued only to the sponsors and its associates, where such subordinate units shall carry only inferior voting or any other rights compared to other units;] [Inserted by Notification No. SEBI/L.A.D.-NRO/GN/2016-17/022, dated 29.11.2016 (w.e.f. 26.9.2014).](h)[ ***] [Omitted by Notification No. SEBI/L.A.D.-NRO/GN/2016-17/022, dated 29.11.2016 (w.e.f. 26.9.2014).](i)the applicant has clearly described at the time of application for registration, details pertaining to proposed activities of the REIT;(j)the [REIT] [Substituted 'applicant' by Notification No. SEBI/LAD-NRO/GN/2018/06, dated 10.4.2018 (w.e.f. 29.9.2014).] and parties to the REIT are fit and proper persons based on the criteria as specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008;(k)whether any previous application for grant of certificate by the [REIT or the parties to the REIT or their directors/members of governing board] [Substituted 'applicant or any related party' by Notification No. SEBI/LAD-NRO/GN/2017-18/022, dated 15.12.2017 (w.e.f. 26.9.2014).] has been rejected by the Board;(l)whether any disciplinary action has been taken by the Board or any other regulatory authority against the [REIT or the parties to the REIT or their directors/members of governing board] [Substituted 'applicant or any related party' by Notification No. SEBI/LAD-NRO/GN/2017-18/022, dated 15.12.2017 (w.e.f. 26.9.2014).] under any Act or the regulations or circulars or guidelines made thereunder.
