Sebi Releases Comprehensive Guidelines Governing Depositary Receipts on REIT and InvIT Units

The Securities and Exchange Board of India (Sebi) has established formal regulations governing the issuance of depositary receipts on units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). These guidelines provide a structured mechanism for domestic trusts to raise capital from international investors by issuing instruments backed by their underlying units. The framework outlines eligibility criteria, compliance obligations, and procedural requirements for issuers and depositaries.

Depositary receipts serve as financial instruments traded on international exchanges that represent local shares or units, allowing foreign investors to gain exposure to domestic assets without direct local registration. For REITs and InvITs, this opens up alternative funding avenues from global institutional investors seeking yields in Indian real estate and infrastructure projects. The regulatory guidelines ensure transparency, investor protection, and alignment with existing securities laws.

Trust managers, compliance officers, and legal advisors must review the new depositary receipt guidelines to structure cross-border offerings effectively. Stakeholders should track subsequent Sebi circulars and operational clarifications regarding issuance procedures and reporting standards. Bottom line: new cross-border investment pathways expand funding options for capital-intensive infrastructure and real estate portfolios.