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On June 24, the Securities and Exchange Board of India (SEBI) allowed the unified payments interface (UPI) mechanism for retail investors who wished to apply for the public offering of real estate investment trusts (REIT) and infrastructure investment trusts (InvIT) for application values up to 5 lakh. The capital markets regulator stated in two separate circulars that the new framework, which aims to further streamline the procedure, will be applicable to the public issue of units of InvIT and REIT, which opens on August 1.

The SEBI, in January 2019, laid down the process for payment for applications in the public issue of units of these new investment instruments through the facility of Applications Supported by Blocked Amount (ASBA).

Separately, the capital markets regulator has agreed to shorten the period of time needed for the allocation and listing of units of privately issued InvIT after the offering is closed from the current need of 30 working days to six working days. The action is a component of SEBI's endeavour to simplify the allocation and listing of units.

REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in the global markets.

While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure assets, such as highways and power transmission assets.

After consultation with stakeholders, it has been decided to provide an additional option to individual investors to apply in public issues of units of REITs and InvITs with a facility to block funds through UPI mechanism for application value up to 5 lakh, SEBI said.

The regulator has asked all the entities involved in the process to coordinate with one another to ensure completion of the listing of securities and commencement of trading by T 6 (trading plus six) working days.

Further, the merchant banker needs to ensure that the process of additional payment mechanism through UPI is disclosed in the offer document and all the newspapers where the issue advertisement is disclosed.

The details of the investor -- PAN and client ID -- entered on the stock exchange platform at the time of bidding, will be validated by the stock exchange/s with the depositories on a real-time basis.

The regulator asked stock exchanges to update demand data on working days on their websites, which will include all the UPI (accepted/pending) and ASBA bids.

The working day for this purpose will be the working day of the stock exchange on which units of REIT and InvIT are proposed to be listed.

The details of commission and processing fees payable to each intermediary and the timelines for payment need to be disclosed in the offer document.

(with PTI inputs)

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