REGISTRATION OF INFRASTRUCTURE INVESTMENT TRUSTS :
Any person shall not act as an InvIT unless it has obtained a certificate of registration from the SEBI under these
regulations. An application for grant of certificate of registration as InvIT shall be made by the sponsor in such
form and in such a manner as prescribed in these regulations.
The SEBI may, in order to protect the interests of investors, appoint any person to take charge of records , documents of the applicant and for this purpose, also determine the terms and conditions of such an appointment. The SEBI shall take into account requirements as specified in these regulations for the purpose of considering grant of registration.
ELIGIBILITY CRITERIA
For the purpose of the grant of certificate to an applicant, the SEBI shall consider all matters relevant to the activities as an InvIT.
Without prejudice to the generality of the foregoing provisions, the SEBI shall consider the following, mandatory
requirements namely,–
(a) Applicant: Applicant must be a Trust and the Trust deed must be duly registered in India under the provisions of the Registration Act, 1908 containing the main objective as undertaking activity of REIT in accordance with the set regulations.
(b) Sponsor: There are not more than 3 sponsors. Each sponsor must have:-
• Net worth of not less than Rs. 100 Crores if it is a body corporate or a company; or
• Net tangible assets of value not less than Rs 100 crore in case it is a limited liability partnership
• Sound track record in development of infrastructure or fund management in the infrastructure sector.
However, in case of PPP projects, where the sponsor is the SPV, the net worth or net tangible assets shall be as defined in the eligibility criteria of the project documents.
Explanation:- For the purpose of this clause, ‘sound track record’ means experience of at least 5 years and where the sponsor is a developer, at least two projects of the sponsor have been completed;
(c) Investment Manager: The Investment Manager has:-
• Net worth of not less than rupees 10 crore if the investment manager is a body corporate or a company or
• Net tangible assets of value not less than 10 crore rupees in case the investment manager is a limited liability partnership.
• Not less than 5 years’ experience in fund management or advisory services or development in the infrastructure sector.
• Not less than 2 employees who have at least 5 years’ experience each, in fund management or advisory services or development in the infrastructure sector;
• Not less than one employee who has at least 5 years’ experience in the relevant sub-sector(s) in which the InvIT has invested or proposes to invest.
• Not less than half of its directors in case of a company or members of the governing board and in case of an LLP as independent and not directors or members of the governing board of another Inv IT;
• An office in India from where the operations pertaining to the InvIT is proposed to be conducted.
• Entered into an investment management agreement with the trustee which provides for the responsibilities of the investment manager in accordance with these regulations.
It should be registered with SEBI under SEBI (Debenture Trustees) Regulations, 1993; not an associate of the sponsor/ manager and the trustee has such wherewithal with respect to infrastructure, personnel, etc. to the satisfaction of SEBI and in accordance with circulars or guidelines as may be specified by SEBI;
(e) The project implementation agreement has been entered into between the project manager, the concessionaire SPV and the trustee acting on behalf of the InvIT which sets out obligations of the project manager with respect to execution of the project.
(f) No unit holder of the InvIT enjoys preferential voting or any other rights over another unit holder;
(g) There shall not be multiple classes of units of InvITs;
(h) The applicant has clearly described at the time of registration, details pertaining to proposed activities of the InvIT;
(i) The applicant, sponsor(s), investment manager, project manager(s) and trustee are fit and proper persons based on the criteria as specified in SEBI (Intermediaries) Regulations, 2008;
(j) Whether any previous application for grant of certificate made by the applicant or any related party has been rejected by the SEBI;
(k) Whether any disciplinary action has been taken by the SEBI or any other regulatory authority against the applicant or any related party under any Act or the regulations or circulars or guidelines made thereunder.
FURNISHING OF FURTHER INFORMATION, CLARIFICATION
The SEBI may require the applicant to furnish any such information or clarification as may be required by it for
the purpose of processing of the application. The SEBI, if it so desires, may require the applicant or its authorized
representative(s) to appear before the SEBI for personal representation in connection with the grant of certificate.
PROCEDURE FOR GRANT OF CERTIFICATE
SEBI on being satisfied that the applicant fulfils, the requirements specified in these regulations, shall send
intimation to the applicant and grant certificate of registration after receipt of registration fees as prescribed in
the regulations.
However, the SEBI may grant in-principle approval to the applicants, where it deems fit and on satisfaction of all
requirements as specified in these regulations, grant final registration to the applicant. The registration may be
granted with such conditions as may be deemed appropriate by the SEBI.
CONDITIONS OF CERTIFICATE
The certificate granted under these regulations shall, inter-alia, be subject to the following conditions,-
PROCEDURE WHERE REGISTRATION IS REFUSED
After considering an application made under these regulation, if the SEBI is of the opinion that a certificate should not be granted to the applicant, it may reject the application after giving the applicant a reasonable opportunity of being heard. The decision of the SEBI to reject the application shall be communicated to the applicant within thirty days of such decision.