New norms proposed by SEBI for Infra Investment Trusts

Markets regulator Securities and Exchange Board of India (SEBI) on 15th June 2016 proposed additional disclosures to be made by the Infrastructure Investment Trusts (InvITs).

The proposed norms are aimed at helping the entities interested in setting up InvITs better understand the regulatory regime for these newly-introduced products.

SEBI has invited comments from all stakeholders till June 28, and said in a consultation paper for the proposed measures that InvITs and REITs, a similar product for the real estate sector, are seen as potential game-changers.

For special purpose vehicles (SPVs), Sebi said "the Investment manager, in consultation with the trustee, shall appoint one or more authorized representative on the Board of Directors/Governing Board of the SPV and the number of such authorized representatives would be on pro-rata basis depending on the stake held in the SPV".

Further, SEBI proposed that InvITs maintain a functional website wherein the contents of the website would be updated up to two days and the website would contain the relevant information such as details of its business and contact information of the designated officials, among others.

For calculation of net the distributable cash flow, the proposal listed that the framework should be in compliance with the Companies Act and be disclosed in offer document and should be followed consistently pursuant to listing.