Take note that the REIT managers need to adhere to the licensing criteria imposed by the MAS. They must satisfy the MAS regards with appointing the CEO, Directors, and Representatives as stated in the SFA section 93.

It is under the general law all are duties of REIT managers: accountable to unitholders for REIT’s assets management and the REIT performance, checking the business’ compliance with the capital standards, ensures the appropriate corporate governance of investors, except assessing investor’s physical fitness. Instead, they evaluate the abilities of the persons who will bring growth and development to the REIT.

It is under the guidelines in licensing criteria and corporate governance arrangements for REIT managers that the MAS must be notified in any case not later than 14 days from the date the CEO or director tender the resignation.

As proposed by MAS, to lessen or avoid conflict of interests possibilities to unitholders with Sponsors and REIT managers, the following shall be prohibited:
(a) payment in the form of shares or interests in the Sponsor or its related entities, or (b) linked in any way to the performance of any entities other than the REIT.

It is clearly stated in SFA that REITs are subject to the Property Fund Guidelines in the Code on Collective Investment Schemes(CIS), which means that they have to comply with the requirements set out in SGX’s Listing Manual. There also are provisions within the Property Fund Guidelines which allowing unitholders of REITs to request for a meeting to be convened under certain circumstances.

Take note that individuals who are not related to and with no expertise on REIT are not qualified to become representatives. Only those who are members of the REIT are allowed to represent the manager on his or her behalf.

Please take note that it is the REIT manager, not the Sponsor, who proposes an appointment to have a review of whether the director had previously worked on the Board of Sponsor. Also, the REIT managers are not listed as entities.

Based on the guidelines set out by MAS, the REIT manager should qualify with the following criteria to have a REIT management license:
1. A REIT manager should satisfy MAS that its controlling shareholders, where applicable, have established track records in managing, investing in, or advising on the type of real estate to be invested by the REIT, for the past 5 years at a minimum.
2. A REIT manager should satisfy MAS that its controlling shareholders, where applicable, have good rankings in their home countries.
3. A REIT manager should conduct the following activities, in relation to the management of the REIT, in Singapore: (a) accounting; (b) compliance; and (c) investor relations.

Conducting mandatory AGMs is essential for the following reasons:
it helps to strengthen the corporate governance regime for REITs in Singapore
it will allow the manager to obtain or renew a general mandate from unitholders for the issue of new units in the coming year

The use of income support arrangements has been useful in acquiring the property wherein:
1. a REIT acquiring a property under a sale and leaseback arrangement, under which the vendor agrees to a relatively short but expensive lease for its own use
2. a REIT raising IPO proceeds (above the amount needed to acquire the initial portfolio) and using these proceeds to support distributions to unitholders post-listing

It is clearly stated in the Securities and Future Act under Securities and Securities-based Derivatives Contracts that if the REIT is in breach of any of the terms and conditions or covenants associated with any credit arrangement or bank loan which could materially affect the REIT’s financial position and results or business operations, or the investments by participants in the REIT, should provide the following:
a. a statement of that fact
b. details of the credit arrangement or bank loan
c. any action taken or to be taken by the Manager to rectify the situation (including the status of any restructuring negotiations or agreements, if applicable)

MAS proposed that choosing the members of the Audit Committee (AC) should meet the following requirements:
The AC must comprise only non-executive directors, the majority of whom, including the AC Chairman, should be independent.
Despite no minimum requirement for the number of directors, MAS proposed to have at least three directors on the AC.

To increase the transparency and accountability of the REITs in terms of Deviations of Actual Distributions per Unit from Forecast Distributions per Unit, the MAS requires that the annual reports shall disclose the following: (1)any material deviation of the actual DPU from the forecast DPU, together with a detailed explanation of the deviation, (2)the total operating expenses of the REIT including all fees paid to the manager, adviser and interested parties, and (3)the distributions declared by the REIT for the financial year.

Under the general law, fiduciary duties are imposed on the directors and statutory duties on the REIT managers. These duties will enhance the protection of REIT unitholders’ interests and are consistent with the requirements that are applicable to trustee-managers of business trusts.

On Operational requirements, the REIT managers are outsourcing their compliance function to their Sponsor or related entities, but under the CG Code, the Audit Committee is responsible for reviewing and reporting to the Board of the REIT manager, the adequacy and effectiveness of the compliance controls of the company.
MAS proposes to require the AC of the REIT manager to state, in the REIT annual reports, whether the compliance arrangements of the REIT manager are adequate and effective, taking into account the nature, scale, and complexity of the REIT manager’s operations.

Based on Securities and Future Act under the provisions of the Second Schedule in an Offer Information Statement for an Offer of REIT Bonds, basic information such as names and addresses of the following shall be stated:
1. Directors (the Manager and each of the directors or equivalent persons of the Manager)
2. Advisers (the issue manager to the offer, if any; the underwriter to the offer, if any; the legal adviser for or in relation to the offer, if any; and the paying agent of the REIT.
3. Guarantor Entity, Advisers and Agents
4. trustee, fiscal agent or any other representative for the holders of the REIT Bonds

Securities and Future Act under the particulars set out in the Second Schedule of An Offer Information Statement for the REIT Bonds, the following shall be indicated:
1. the the time at, date on, and period during which the offer will be kept open, and the name and address of the person to whom the purchase or subscription applications are to be submitted
2. the circumstances under which the offer period may be extended or shortened and the duration by which the period may be extended or shortened
3. how any extension or early closure shall be made public

The REIT shall ensure to make statements that won’t put the REIT Bonds at stake. Note that credit rating may be revised or withdrawn, and not a recommendation. It must highlight that investors will evaluate the investment.

As cited in the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) (Exemption from Subdivisions (2) and (3) of Division 1 of Part XIII for REIT Bonds) Regulations 2011, the conditions on the exemption for the offer made using OIS some are as follows:
a. comply with the requirements set out in the First Schedule
b. contain the particulars set out in the Second Schedule
c. signed by every director or an equivalent person of the Manager and every person who is named in the offer information statement as a proposed director or an equivalent person of the Manager

Under the borrowing limits in the Property Fund Guidelines of the Code on Collective Investment Scheme (CIS) states that the total borrowings and deferred payments of a REIT will not exceed 35% of the funds deposited property. The leverage limit may rise to a maximum of 60% when a credit rating is obtained and disclosed to the public. This rule is to ensure that REITs will not over-extend themselves by pursuing highly geared property acquisitions.

According to account feedback from market participants, the MAS made options with underlying conditions on how to enhance the independence requirements wherein the REIT managers should ensure that the majority of the board or at least half or one-third are independent directors.

In the exemption for an offer made using offer information statement through an automated teller machine: before the prospective subscriber or purchaser apply to subscribe for or purchase the REIT Bonds, he/she must be informed of how to obtain, or arrange to receive, a copy of the offer information statement relating to the offer.

Particulars to be included in An Offer Information Statement for An Offer of Reit Bonds following the SFA guidelines: the name of the credit rating agency, the credit rating, payment transactions to the credit rating agency, and date when the REIT got a credit rating was given must be publicized.

REIT managers’ fees and incentives include management fees, acquisition fees, divestment fees, and development management fees (a base fee and performance fee). The base fee is computed based on a fixed percentage of the value of the REIT’s deposited properties, and the performance fee is pegged to certain metrics.

On the front cover of the OIS, all the necessary information on making investments in the REIT Bonds, such as date of lodgment of the OIS, name of the REIT, persons related, and others, must be carefully provided.

The OIS of the Offer of the REIT Bonds must include in its Offer Statistics the following: where the amount of subscriptions sought is fixed and is not at the date of the lodgment, the nature and denomination of the REIT Bonds being offered, where the number of REIT Bonds being offered is fixed and is not at the date of lodgment, the face value of the REIT Bonds being offered, and the currency of the issue.

The following information should be provided on the REIT per by the guidelines on the OIS for the Offer of the REIT Bonds:the nature of operations and principal activities of the REIT, the general development of the REIT from the beginning of the period comprising the 3 most recent completed financial years to the latest practicable date, indicating any material change in the affairs of the REIT, the participants’ funds in and borrowings of the REIT, number of units of the REIT owned by each substantial participant, any legal or arbitration proceedings
where any units in the REIT have been issued within the 12 months, a brief summary of each material contract that could result in the trustee of the REIT being under an obligation or entitlement that is material to the ability of the REIT to meet its obligations to holders of the REIT Bonds.

The Auditors show a secured REIT Bonds with a tabular summary of the aggregate values of the tangible assets (owned by the REIT, owned by each, or jointly owned by 2 or more, of its guarantor entities, and jointly owned by the REIT and one or more of its guarantor entities), the amounts outstanding of the aggregate amounts borrowed, and the amount of advances by the REIT to related corporations or related entities of the REIT, distinguishing between advances which are secured and advances which are unsecured.

The REIT manager is liable to legal costs when liabilities and claims arose from any fraud, gross negligence or wilful default of the REIT manager, or a breach of the trust deed by the REIT manager. The minimum set of the amount of coverage must comply, which is S$100m.

It is necessary to explain the plan of distribution and the terms of the agreement present in the OIS on the offer of the REIT Bonds to establish securities on the investments.