Sebi prescribes disclosure norms for infrastructure investment trusts

Market regulator Securities and Exchange Board of India (Sebi) has prescribed disclosure norms for infrastructure investment trusts, under which such InvITs have to inform stock exchanges about utilisation of the funds raised by them in the market.

These disclosures are to be made on a continuous basis to the stock exchange(s) where its units are listed. The said disclosures, inter-alia, include disclosures for financial as well as non-financial information.

InvITs will also have to give details of the fees paid to investment and project managers as also share details about the methodology for computation, Sebi said in a circular.

The InvITs will have to make disclosures about half- yearly and annual financial information as well as unit holding pattern. They should also ensure that adequate steps are taken for expeditious redressal of investor complaints. 

Sebi had last month issued disclosure norms that need to be followed by InvITs while filing offer documents and the new norms have been incorporated in the new list.

Sebi board had in September decided to relax certain InvITs norms in a bid to develop the corporate bond market to attract more foreign investments into the India and allowed a select categories of foreign portfolio investors (FPIs) to directly trade in the debt segment of the market, bypassing brokers.

Sebi relaxed norms for both real estate investment trusts (REITs) and relaxed rules for investing in the infrastructure sector through Infrastructure Investment Trusts (InvITs).

A real estate investment trust (REIT) is a novel investment mechanism being contemplated by the Securities and Exchange Board of India (Sebi). REITs and InvITs are popular investment vehicles in developed markets in the real estate sector.

Sebi had last month also approved amendments to the Infrastructure Investment Trusts (InvIT) and Real Estate Investment Trust (REIT) regulations, in order to facilitate infrastructure investments.

The amended InvIT Regulations provide for allowing InvIT to invest in two level SPV structure through holding company (Holdco), subject to sufficient shareholding in the Holdco and the underlying SPV and other safeguards.

InvIT will have right to appoint majority directors in the SPV and the Holdco will distribute 100 per cent cash flows realised from underlying SPVs and at least 90 per cent of the remaining cash flows.

The amended InvIT regulations also provides for reducing mandatory sponsor holding in InvIT to 15, does away with the limit on the number of sponsors of InvIT and rationalising the requirements for private placement of InvIT.

The Sebi board also approved foreign investors to hold up to 15 per cent in stock exchanges in India.

In July the government had hiked the stake from the earlier ceiling of 5 per cent. Foreign banks, insurance companies and depositories are now allowed to have higher stakes in Indian bourses.