SEBI CIRCULAR DATED AUGUST 22, 2024 w.r.t InvITs - MMJC

Introduction:

SEBI vide its circular dated August 22, 2024[1] bearing no. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2024/114 (“Amendment Circular”) has made an amendment in the Securities and Exchange Board of India Master Circular for Infrastructure Investment Trusts (InvITs) (“Master Circular”) dated May 15, 2024.

SEBI vide its consultation paper dated May 09, 2024 had invited comments from the public on the proposed amendments for the InvITs in the SEBI (Infrastructure Investment Trust) Regulations, 2014. The proposal in the consultation paper were further approved by SEBI in its meeting held on June 27, 2024. These amendments are effective with immediate effect i.e. from August 22, 2024.

Amendment:

Review of Statement of Investor Complaints:

Paragraph 4.16.4. of the Master Circular stands modified as under:

“The Trustee and the Board of Directors/Governing Body of the Investment Manager shall ensure that all investor complaints are redressed by the Investment Manager in timely manner. Further, the statement as specified in Para 4.16.3. above shall be placed, on a quarterly basis, before the Board of Directors/Governing Body of the Investment Manager and the Trustee for review.”

Timeline for Disclosure of Statement of Deviations:

Paragraph 4.17.2. of the Master Circular stands modified as under:

“The statement(s) specified above, shall be continued to be given till such time the issue proceeds have been fully utilised or the purpose for which these proceeds were raised has been achieved. Such statement(s) shall also be placed before the Trustee and the Board of Directors/Governing Body of the Investment Manager for review. Pursuant to such review, the statement shall be submitted to the stock exchange(s). Such submission to the Stock Exchange(s) shall be made along with the submission of financial results.”

Implication:

In context of Review of Statement of Investor Complaints, vide this Amendment Circular, SEBI has aligned the requirement for reviewing investor complaints with SEBI’s LODR Regulations. Previously, the Board of Directors and the Trustee had to review these complaints before they were submitted to the stock exchanges. Now, instead of a prior review, the statement of investor complaints is now to be reviewed quarterly. Further, such statement, pursuant to filling, is required to be placed before the Board and Trustee for review on a quarterly basis. So, in the upcoming meeting, of Trustees and Board of Directors/ Governing body of Investment Managers statement of investor complaints for quarter ended September 2024 would be required to be placed.

In context of timeline for Disclosure of Statement of Deviations, vide this Amendment Circular, SEBI has aligned the timeline of submission of Statement of Deviations with SEBI’s LODR Regulations. Previously, such statement was required to be submitted within 21 days from the end of quarter. Now, this statement of Deviations is required to be submitted along with the submission of quarterly results. If any InvIT is required to submit statements of deviations, then for quarter ended September 2024 the statement of deviations and variations would be required to be submitted alongwith financial results.

These changes are intended to make it easier for Infrastructure Investment Trusts (InvITs) to operate more efficiently and to promote the ease of doing business for InvITs.

[1] https://www.sebi.gov.in/legal/circulars/aug-2024/amendment-to-master-circular-for-infrastructure-investment-trusts-invits-dated-may-15-2024-review-of-statement-of-investor-complaints-and-timeline-for-disclosure-of-statement-of-deviation-s-_86047.html