The Securities and Exchange Board of India (SEBI) has amended regulations for real estate investments trusts (REITs) and infrastructure investment trusts (InvITs) in a bid to make these instruments more attractive for raising capital. SEBI has allowed REITs and InvITs to invest in two-level special purpose vehicle (SPV) structures through a holding company. This is subject to sufficient shareholding in the holding company and the underlying SPV. SEBI has also removed the limit on the number of sponsors (earlier, three sponsors were required) and the trusts are given the right to appoint majority directors in the SPV. Further, the holding company will be allowed to distribute 100 per cent cash flow realised from the SPVs and at least 90 per cent of the remaining cash flow. With regard to REITs, SEBI has proposed to allow up to 20 per cent investment by such trusts in under-construction projects, up from the current 10 per cent. The board has also clarified the definition of “real estate property” in the regulations. For InvITs, SEBI has approved a proposal to reduce mandatory sponsor holding to 15 per cent and has rationalised the requirements for private placement of InvITs.