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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2023

16-Aug-2023 | SEBI/LAD-NRO/GN/2023/145

Securities and Exchange Board of India has issued the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2023, amending the provisions under the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, effective from 16th August 2023. Key Highlights of the Amendments: 1. Amendment to Regulation 12: The existing sub-regulation (3), clauses (i)-(iii) thereunder, and the first proviso to clause (iii) have been substituted with new provisions. These provisions state that the sponsor(s) and sponsor group(s) collectively must hold not less than fifteen percent of the total outstanding units of the InvIT for a duration of three years from the date of listing of units in the initial offer. The amendment outlines the responsibilities and obligations of the sponsor(s) and sponsor group(s) during this period, including their liability for acts, omissions, representations, and covenants of the InvIT. 2. Insertion of Sub-regulation (8): A new sub-regulation (8) has been added in regulation 22. This new sub-regulation provides conditions for existing sponsors planning to disassociate by converting the Investment Manager to a Self-Sponsored Investment Manager. The conditions include requirements such as a minimum five-year listing period for the InvIT, compliance with distribution norms, and achieving a AAA rating. 3. Additionally, Schedule VIII introduces Stewardship Code that outlines principles to be followed by any unitholder holding not less than ten percent of the total outstanding units of the InvIT: a. They must act in the best interests of the InvIT and its unitholders as a whole. b. They should formulate a comprehensive policy on the discharge of their stewardship responsibilities and review and update the same periodically. c. They should have a policy to manage issues of conflict of interest while fulfilling their stewardship responsibilities. etc.

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