InvITs/ REiTs

SEBI board meeting decision dated 28th June, 2023 regarding board nomination rights to unit holders of InvITs / ReITs

Over the years, retail investor interest in InvITs and REITs has been increasing. The current regulatory framework for InvITs/ REITs (“Funds”) does not explicitly provide for unitholders to have a say in the decisions made by the Investment Managers/ Managers of these Funds. However, big investors in InvITs/ REITs often have a say in investment decisions by nominating a director on the Board of the Investment Manager/Manager.

Considering that, REITs / InvITs often acquire their assets from one of the sponsors (i.e. related party transactions) and that these Funds are permitted to take on leverage, the decisions of the Investment Manager/ Manager can have long term material implications on the returns to unitholders. Thus, it is important that all unitholders have a say in the decisions made by the Investment Manager/ Manager and not only those who have a significant unitholding.

Accordingly, the Board approved amendments to the SEBI (Infrastructure Investment Trusts) Regulations, 2014 and SEBI (Real Estate Investment Trusts) Regulations, 2014 to provide nomination rights to unitholders holding ten percent or more of the total outstanding units of the InvIT/REIT, either individually or collectively, on the board of directors of the Investment Manager / Manager. This ensures pro-rata rights to all unitholders.

Further, the principles of Stewardship Code shall be applicable for all unit holders holding ten percent or more of the total outstanding units of the InvIT/ REIT.

Monica, O my darling

A kind of a run of the mill psycho thriller directed by Vasan Bala, “Monica, O my Darling” (2022), starring Rajkummar Rao, Huma Qureshi, Radhika Apte among others.

The story is slightly different and refreshing as it encompasses some element of robotic horror. Jayant (Rajkummar Rao) is working in a robot making firm in which he is dating the daughter of the owner.

There is some tension in the firm as one employee got crushed in a robotic accident. The owner’s step son Nishant (Sikander Kher) is annoyed with Jayant being made the Director. Meanwhile Monica (Huma Qureshi) has gone around sleeping with almost everybody.

She gets pregnant and threatens blackmail. Jayant’s sister Shalu (Zayn Marie Khan) is wooed by another employee Gaurav (Sukant Goel). Soon Nishant ends up dead and accountant Arvind (Bhagavati Perumal) is killed by a snake bite.

ACP Naidu (Radhika Apte) gets into the act and begins her shallow investigation. Things get into a tangle from then on and it all ends up in a tumultuous climax. Director Vasan Bala has kept it neat with a tight script. Interesting from the point of view of a robot being used to murder someone. First time i am seeing that in Indian cinema.

Of the cast, Rajkummar Rao and Radhika Apte are passable but they are getting slotted into their normal acts which after a point of time gets pointed out. They need to do more genre defying roles. Others are just about mediocre. IMDB 4/10

Picture taken from the internet for representational purpose only not with an intention to violation of copyright

8.88 kms

8.88 kms – no rains, strong head winds & terrible humidity, oh yes, it did start raining immediately after i stopped my run, damn. Somehow managed to squeeze in 100 kms for june, 101.85 kms. Have a great day folks.

InvITs/REITs

Board decision by SEBI dated 28th June, 2023 relating to InvITs/ ReITs

Revision of minimum unitholding requirement for Sponsor(s) and introduction of provision for Self-Sponsored Investment Manager/Manager of InvITs/ REITs

InvITs and REITs are asset monetization vehicles which recoup investments over a very long period of time. Generally, the Sponsor who sets up the InvIT/ REIT, monetizes its assets by transferring them to the
InvIT/ REIT and exerts control over the decisions of the InvIT/ REIT through significant shareholding in the Investment Manager/ Manager. Therefore, it is essential that the interests of the Sponsor remain aligned
with the interests of investors during the life of these investment vehicles. Presently, SEBI Regulations mandate the Sponsor to hold a minimum of 15% units for a period of at least three years from the date of listing of units.

In order to ensure continued alignment of interests during the life of the investment vehicle, the Board has approved that Sponsor of InvIT/ REIT be required to hold a certain minimum unitholding on a reducing scale for the entire life of the InvIT/ REIT. Further, the mandatory minimum unitholding shall be locked-in and be unencumbered.

Further, to create an opportunity for mature and independent, professionally managed Investment Managers to emerge, and to provide an additional exit option for the Sponsor of InvIT/ REIT, the Board
approved the proposal for introduction of Self-Sponsored Investment Manager/ Manager i.e. an Investment Manager/ Manager who also takes on the responsibilities of the Sponsor of InvIT/ REIT.

Some of the key conditions for conversion of Investment Manager/ Manager to Self-Sponsored Investment Manager/ Manager include–
i. The InvIT/ REIT to have been listed for at least 5 years
ii. at least one of the sponsor(s) proposing to disassociate to have been a sponsor of the InvIT/ REIT for a minimum period of five years
iii. The Investment Manager/ Manager to meet the net worth criteria specified for the Sponsor
iv. Post conversion, the minimum unitholding requirement applicable to sponsor(s) and sponsor group(s) to be complied with by the Investment Manager/ Manager, shareholders of the Investment Manager / Manager and/or group entities of Investment Manager/Manager
v. the existing sponsor(s) or its associate(s) to not own or control the Investment Manager/ Manager, on or after the date of conversion.

corporate bond market

Updates from SEBI board meeting decisions of 28th June, 2023

With the objective of development of the corporate bond market, the SEBI Board in its meeting held on September 29, 2020, approved a proposal to facilitate the setting up of a Limited Purpose Clearing Corporation for clearing and settling repo transactions in corporate debt securities. Launch of the LPCC is expected to facilitate active trading, especially by market makers, by enabling them to finance their inventory of bond holdings through an active repo market. This in turn is expected to improve liquidity in the corporate bond market.

Since timely availability of funds and securities is critical in a repo market, direct participation of both borrowers and lenders can widen the market. Accordingly, the Board has approved the proposal to additionally facilitate participation by entities desiring direct participation (not through a clearing member) in repo transactions in corporate bonds of the LPCC.

debt securities

GST of decisions taken at the SEBI board meeting held on 28th june, 2023

Introduction of provisions in respect of (a) listing of non-convertible debt securities and (b) voluntary delisting of non-convertible debt securities

The Board approved the amendment to SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015 requiring listed entities having outstanding listed NCDs (as on December 31, 2023) to list their subsequent issuances of NCDs at the stock exchange(s).

This new requirement which will come into effect from January 01, 2024, is aimed at,
i. facilitating transparency in price discovery of non-convertible debt securities,
ii. better disclosures to investors and the market, and
iii. avoiding ISIN level confusion and possible mis-selling of unlisted bonds.
Based on feedback during the consultation process, the following types of issuances are exempted from the applicability of the aforesaid requirement:
i. Capital Gains Tax debt securities issued under section 54 EC of the Income Tax Act, 1961;
ii. Non-convertible securities issued pursuant to an agreement entered into between the listed entity of such securities and multilateral institutions, subject to the condition that such non-convertible debt securities shall be locked-in and held till maturity and accordingly shall be unencumbered.
iii. Non-convertible debt securities issued pursuant to an order of any Court or Tribunal or regulatory requirement as stipulated by a financial sector regulator namely, SEBI, RBI, IRDA, PFRDA or IBBI

If an entity with listed debt securities has outstanding unlisted NCDs as on December 31, 2023, the entity will have the option to list them, but it would not be mandatory to do so.

The Board also approved the proposal for enabling entities having listed debt securities to delist such securities, subject to compliance with certain requirements including approval from all holders of debt
securities, suitable disclosures to the Stock Exchanges, etc.

Unlike equity, wherein approval by a threshold majority is sufficient for approval of delisting, approval of 100% of the debt security holders is mandated for delisting of debt securities. This is because, unlike equity which is a perpetual instrument, listed debt securities have a finite term to maturity.

Entities having privately placed, listed debt securities wherein the number of debt security holders is less than 200, shall be eligible to delist their debt securities under this framework.

public issues

Gist of decisions taken at SEBI board meeting dated 28th March, 2023

The Board approved the proposal for reducing the time period for listing of shares in Public Issue from existing 6 days to 3 days, from the date of issue closure (T Day). The revised timeline of T+3 days shall be made applicable in two phases i.e. voluntary for all public issues opening on or after September 01, 2023 and mandatory on or after December 01, 2023.
This follows extensive consultation with all stakeholders including Anchor investors, Registrar & Transfer Agents, Broker-distributors, Banks, etc. Extensive stress testing has been done to confirm that the transition to T+3 would be smooth.
The reduction in listing timeline is expected to benefit the stakeholders in the following ways:
i. Issuers would receive their funds and allottees would receive their securities in a shorter time period.
ii. Subscribers who were not allotted shares would receive their moneys back quickly
iii. Kerb trading of securities, if any, will be curbed
iv. Resources of all stakeholders like stock exchanges, banks, depositories, brokers in public issue process will be deployed for a shorter period.

penalty on transunion cibil

The Reserve Bank of India (RBI) has, by an order dated June 26, 2023, imposed a monetary penalty of ₹2.6 million on TransUnion CIBIL Limited, Mumbai (the company) for non-compliance with certain provisions of the Credit Information Companies (Regulation) Act, 2005 [CIC (R) Act] read with the Credit Information Companies Rules, 2006 [CIC Rules].

Background

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2021 and examination of the Inspection Report, supervisory letter and all related correspondence pertaining to the same revealed, inter alia, that (i) certain data relating to the credit information maintained by the company was not accurate and complete, and (ii) on receipt of complaints from some borrowers, the company had neither updated the credit information relating to them nor informed them regarding the steps taken by it for correction of discrepancies and also the reasons for its inability to comply with the timeframe for providing correct information, within 30 days of receipt of such complaints.

penalty on experian

The Reserve Bank of India (RBI) has, by an order dated June 26, 2023, imposed a monetary penalty of ₹2.475 million on Experian Credit Information Company of India Private Limited, Mumbai (the company) for non-compliance with certain provisions of the Credit Information Companies (Regulation) Act, 2005 [CIC (R) Act] read with the Credit Information Companies Rules, 2006 [CIC Rules]. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of clause (iii) of sub-section (1) of section 25 read with sub-section (4) of section 23 of CIC (R) Act.

Background

The statutory inspection of the company was conducted by RBI with reference to its financial position as on March 31, 2021 and examination of the Inspection Report, supervisory letter and all related correspondence pertaining to the same revealed, inter alia, that certain data relating to the credit information maintained by the company was not accurate and complete. Consequently, a notice was issued to the company advising it to show cause as to why penalty should not be imposed for its failure to comply with the provisions of the CIC (R) Act read with CIC Rules, as stated therein.

penalty on SCB

The Reserve Bank of India (RBI) has, by an order dated June 26, 2023, imposed a monetary penalty of ₹3 million on Standard Chartered Bank-India (the bank) for non-compliance with certain provisions of the ‘Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016’. This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949.

Background

The Statutory Inspection for Supervisory Evaluation (ISE 2021) of the bank was conducted by RBI with reference to its financial position as on March 31, 2021. The examination of the Risk Assessment Report/Inspection Report pertaining to ISE 2021 and review of compliance with KYC directions in the bank carried out by RBI and all related correspondence in that regard, revealed, inter-alia, that the bank allotted multiple customer identification code to some of its individual customers.

Great Zimbabwe

BBC four part series on the lost kingdoms of Africa, this is part 3 where Dr. Gus Casely-Hayford goes to Greater Zimbabwe. 

Greater Zimbabwe is a city in the southern part of Zimbabwe which was the capital of a kingdom but not certain which king ruled here. They have stone walls with narrow passages that had some significance. 

Before that he went to Manyikeni an architectural site in Mozambique which has got some connection with the Greater Zimbabwe style of buildings. 

The Kingdom of Mapungubwe in present day South Africa is also another place where gold trading used to take place and there were links to the Swahili Coast of East Africa. Its a world heritage site 

Two other places that Gus visited were Kilwa Kisawani and Rhapta and both were gold trading centres. Kilwa Kisawani is in Tanzania and now a World Heritage Site. Moroccan traveller Ibn Batuta apparently visited Kilwa and was mightily impressed by it. Lot of trade used to take place in the ancient past between the east coast of Africa and the Gulf Arab regions, India and China. 

Good series to watch so far. 

spirituality

Daily writing prompt

How important is spirituality in your life?

View all responses

Spirituality is important from the point of a balance in one’s life. It cannot be the overarching goal of anyone, unless that person wants to lead a spiritual life and become a spiritual speaker.

Spirituality encompasses religion and embraces in its fold mantra chanting, prayers and meditation. Mantra chanting is important from a therapeutic point of view. If you chant the mantras aloud, then it reverberates to your heart and gives you peace of mind and reduces the stress in your life.

Prayers also do the same but one need not read the prayers aloud. You can read it quietly also and it delivers the same effect. Prayers has a very calming influence on the mind and the same thing you get when you visit the temples near your office. The pealing of the temple bells has a very pleasing quality to it.

Meditation enables one to calm the agitated soul. Its also very therapeutic in the sense that when you meditate focusing on your breathing or listening to sounds it has a very calming effect on the mind. You are able to concentrate better when you meditate.  

3.29 kms

a short run of 3.29 kms to keep the momentum going. Have a great day folks.

San Marino

Interesting documentary on the small microstate in the heart of Italy, San Marino.

San Marino is a landlocked country situated within the boundaries of Italy. Its probably the oldest republic in the world and has its own government, military and police force.

Banking, electronics & ceramics are the key industries and the main agricultural products are wine and cheese. The language spoken in San Marino is Italian, although they have their own currency San Marino Lira, they are allowed to use the Euro, though they are not part of the EU.

The documentary does go through the entire history of San Marino. The documentary is a fully narrative one by a host with not many videos or photos, so it that sense it fails to keep the interest alive. You can watch the documentary here

Mischief

A psycho thriller from Charlotte Armstrong with “Mischief”.

Ruth and Peter have to hire a babysitter for their 9 year old daughter Bunny as they have to attend a function in which Peter is the guest speaker. The hire the liftman Eddie’s niece Nell who at 19 appeared a bit diffident at first.

Ruth had her apprehensions still she had to be with her husband at the function so they left Bunny in Nell’s care. Nell turned out to be a psychopath with hurting tendencies.

A nightmare followed with a host of other characters in tow, Jed who broke up with his girlfriend Lyn and tried to be friendly with Nell, a Mrs .Bellow who heard some noise and came to investigate and uncle Eddie who came twice to check whether all was right.

The night turned out to be violent for Bunny and uncle Eddie and Jed who tried to escape from the room and Ruth who came back early as she had some doubts in her mind. My first one of Charlotte Armstrong, the narrative could have been better. Goodreads 3/5