SEBI’s Investor Charter for REITs: Enhancing Transparency and Protection in India’s REIT Ecosystem

Introduction

On June 12, 2025, the Securities and Exchange Board of India (“SEBI”) has come up with an important circular that dictates a fully detailed Investor Charter for Real Estate Investment Trusts (“REITs”)(“Charter”). The regulatory intervention is a strategic step towards better financial consumer protection as well as the overall attempt to improve financial inclusion and literacy in the securities market in India. This circular is in continuation of older guidelines, including the 2021 circular, the Master Circular for REITs of May 15, 2024, as well as the current developments in the recent landscape, e.g., the Online Dispute Resolution (“ODR”) platform, or SCORES 2.0. This move shows that SEBI has been keen on ensuring investor confidence in this dynamic REIT sector by having standardised business operations, greater transparency and an effective grievance redressal system.

Explanation

The circular sets up a varied structure which focuses on the protection of the investor as well as the standardisation of the market. Fundamentally, in the Charter, the vision is set out clearly: “to pursue a higher growth and development of the Real Estate Investment Trust sector in India”, with the explicit aim of building of: “integrity and excellence, and supporting industry best practices that are benchmarked to the leading global REIT practices”. This vision has been assimilated by a set of twelve complete mission statements that jointly focus on the establishment of a “Dynamic, Transparent, Ethical and Globally Competitive REIT Sector” with high professional standards and responsible information to the stakeholders. Another important detail in the circular is that it is compulsory to ensure all REITs and IRAs feature the ICharter on their websites, apps, phones and offices. More so, REITs should take the initiative of getting the charter known to investors via several forms of communication, such as emails and letters. This will make the investor rights and protection be seen and known by as many people as possible.

The circular further requires grievances to be handled transparently by all the registered REITs, so that they shall put up the complaints data on their websites on or before the 7th day of next month in a uniform format as given in Annexure-B. The Charter carefully outlines the service standards which the REITs are expected to follow, putting in place clear schedules of the kind of activities aforementioned to be undertaken by the investor. To give an example, distribution recommendations should be given within 5 working days after completion, distribution proceeds should be given within 5 working days after the record date, and annual reports should be disclosed within 3 months after the financial year end. These standardised timelines have made REIT operations forecastable and responsible, where investors can have a clear expectation of service delivery. The circular also lays out a formal grievance redressal system and instructs investors in the first instance to address their grievance to the concerned REIT or its Registrar and Transfer Agent, and to adjudicate a remedy to the SEBI SCORES portal in case of need or the SMART ODR platform. By having such a tiered solution, any investment complaints are given due attention and several options for resolving the same. The charter also contains detailed provisions on Do’s and Don’ts that must be followed by investors forms the key aspects, which are registration status of REIT, the necessity of reading the offer documents, the necessity of keeping the personal information updated and the necessity of avoiding the speculative investments based on rumours or promises of high returns.

Conclusion

The entry of the SEBI Investor Charter to REIT is also a breakthrough in the regulatory jurisdiction of the Indian REIT industry. The circular is also expected to bring more confidence and involvement in this new asset class by making transparent standards of transparency, investor rights and grievance redressal. A holistic approach to investor protection is reflected by the fact that the charter is very broad, and it touches on every aspect of vision and mission statements, detailed service standards and investor guidelines. With the ongoing development of the REIT market in India, the given regulatory framework will be instrumental in adjusting the market practices to the global ones and considering the requirements of the local market. The urgency underlying the introduction indicates the primary regulatory importance given to the protection of the investors, which seems to imply that SEBI regards this aspect as a bedrock on which the sustainable development of the Indian REIT environment can be anchored. Going forward, the success of this charter in future will rest upon stiff enforcement and review after sometimes and this is to ensure it remains valid in a changing market.