Real estate investment trusts structured as collective investment schemes will now be covered by the Singapore takeover code. The Securities Industry Council (SIC) has decided to extend the ambit of the Singapore Code on Takeovers and Mergers to property trusts structured as collective investment schemes (REITs). The decision is in line with the regimes in the UK and Australia, where property trusts are subject to takeover provisions. The application of the code to REITs, says the Monetary Authority of Singapore, would not only protect the interests of minority investors but also that of the incumbent controlling unitholders. MAS adds that in the absence of a comprehensive framework governing takeover and merger transactions of REITs, a party would be able to accumulate effective control of a REIT without incurring a general offer obligation. The new framework which aims to ensure the fair and equal treatment of all unitholders would enhance the reputation of the REIT market in Singapore and add to its growth. Further, says MAS, concerns relating to proper governance and accountability are equally applicable to REITs. MAS, at the request of SIC, will be making the amendments to the Securities and Futures Act and the code to enable the extension of the code to REITs. Before the changes take effect, the SIC suggests that parties engaged in takeover or merger transactions involving REITs comply with the existing code. In particular, parties intending to acquire 30 per cent or more of the total units of a REIT or when a holding of not less than 30 per cent but not more than 50 per cent of the total units of a REIT, acquire more than one per cent of the total units of the REIT in any six-month period, should make a general offer for the REIT. The SIC should be consulted in cases of doubt.