Sebi Unveils Unit-Based Employment Benefit Scheme for REITs and InvITs

Sebi has introduced a unit-based employment benefit scheme for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This new scheme will be implemented through Employee Benefit Trusts, which will manage the allotment of units to employees. The amended rules took effect from July 12.

In a significant move, the capital markets regulator Sebi has rolled out a framework for a unit-based employment benefit scheme targeting Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This initiative aims to benefit employees through a structured Employee Benefit Trust (EB Trust).

According to the guidelines, the investment manager can receive the units of InvIT/REIT in lieu of management fees, with the prime objective of offering unit-based benefits to their employees. Importantly, the EB Trust is restricted from undertaking any transfer or sale of these units except for the prescribed employee benefits.

This framework, effective from July 12, also includes stringent compliance measures under Sebi's insider trading and PFUTP regulations. While REITs contain commercial real estate assets, InvITs consist of infrastructure projects like highways, positioning them as lucrative investment avenues in India.