SEBI, vide notification dated May 27, 2024, has issued the SEBI (InvIT) (Amendment) Regulations, 2024, amending SEBI (InvIT) Regulations, 2014 (“Principal Regulations”). Some of the key amendments are as follows:
- a new term “subordinate unit” is defined to mean an instrument issued by an InvIT which can be reclassified as an ordinary unit, where ordinary unit hods the same meaning as the term unit in the Principal Regulations;
- under the mandatory requirement for eligibility criteria of registration of an InvIT, there is only 1 (one) class of units, and all units carry equal voting rights and distribution rights. The unitholder(s) holding not less than 10% of the total outstanding units of the InvIT, are entitled to nominate 1 (one) director on the board of directors of the investment manager and are required to comply with stewardship code specified in Schedule VIII of the Principal Regulations;
- under the right and responsibility of the sponsor and sponsor group(s), for the purpose of calculating the minimum unitholding requirements, subordinate units cannot be considered in computing total outstanding units of the InvIT and are not eligible for meeting the minimum unitholding requirement;
- no InvIT can raise funds through public issue if any subordinate units have been issued and are outstanding;
- a new chapter (Chapter IVA) is inserted regarding the framework for issuance of subordinate units; and
- the investment manager must disclose the unitholding pattern for ordinary units and subordinate units separately as specified by the SEBI.
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