【精选】REITS_Consultation_Paper_Review_of_Regulatory_Regime_governing_REITs.pdfVIP

CONSULTATION PAPER P006 - 2005 June 2005 Review of the Regulatory Regime Governing REITs CONSULTATION PAPER ON REVIEW OF THE JUNE 2005 REGULATORY REGIME GOVERNING REITS PREFACE A real estate investment trust (“REIT”) established as a unit trust is regulated as a collective investment scheme (“CIS”) under the Securities and Futures Act (“SFA”). As with unit trusts investing in equity or debt securities, REITs structured as unit trusts are subject to parameters on permissible investments, borrowing limits and annual reporting requirements. The relevant rules are set out in the Property Fund Guidelines (“Fund Guidelines”) under the Code on Collective Investment Schemes (“Code”). The Fund Guidelines, introduced in May 1999, represented the culmination of extensive efforts of researching international best practices and consulting the industry to support 1 the introduction of REITs in Singapore. 2 Today, there are five REITs listed on the Singapore Exchange - all of which are structured as unit trusts. In the current low interest rate environment, investors have rapidly embraced this new asset class due to their relatively higher yields. Fuelled by the positive market sentiment towards existing REITs and tax incentives available, many entities have openly expressed interest in transferring their properties into REITs. 3 Although REITs structured as unit trusts need to comply with rules on permissible investments, borrowing limits and annual reporting requirements, they are regulated with a relatively light touch when