On 14-2-2023, the Securities and Exchange Board of India (‘SEBI’) issued the SEBI (Infrastructure Investment Trusts) (Amendments) Regulations, 2023 to amend the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (‘InvIT’). All the provisions came into force on 14-2-2023 except for Regulation 3 sub- regulations (1) and (6) which will come into force on 1-4-2023.
Key Points:
1. The definitions of “Independent director”, “Senior Management” have been inserted in Regulation 2.
2. Regulation 10 talks about the rights and responsibilities of an Investment Manager (‘IM’). In the same context, subs- regulation 6A has been inserted which says that the IM cannot appoint or re- appoint an individual as auditor for more than 1 term of 5 consecutive years or any audit firm for more than 2 terms of 5 consecutive years.
3. In Regulation 13 which talks about the rights and responsibilities of the valuer and auditor, a new sub- regulation has been inserted which says that the auditor will have to undertake a limited review of the audit of all the entities or companies whose accounts are to be consolidated with the accounts of the InvIT.
4. Regulation 18 lays down the investment conditions and dividend policy whereby a new sub regulation has been inserted stating that in case any amount remains unclaimed or unpaid out of the distributions declared by a InvIT will be transferred to “Investor Protection and Education Fund”.
5. Chapter VIB has been inserted which lays down the ‘Obligations of the Investment Managers’. This chapter lays down the following:
• additional requirements for constituting the Board;
• Vigil mechanism which will be formulated by the IM;
• Secretarial Compliance Report will be submitted by the IM within 60 days from end of each financial year;
• The Quarterly Compliance Report on Corporate governance will also be submitted by the IM within 21 days from the end of each quarter.
6. Schedule VII has also been inserted which lays down the Governance Norms for:
• Part A- minimum information to be placed before Board of Directors of the IM
• Part B- Compliance Certificate
*Kriti Kumar, Editorial Assistant has reported this brief.