Sebi puts in place disclosure norm for InvITs

Sebi puts in place disclosure norm for InvITs

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SEBI-INVITS
Sebi puts in place disclosure norm for InvITs
New Delhi, Nov 29 (PTI) Putting in place a few more disclosure norms for Infrastructure Investment Trusts (InvITs), Sebi today asked such entities to inform stock exchanges about utilisation of the funds raised.
InvITs will also have to provide justifications for the fees paid to investment and project managers as also share details about the methodology for computation, Sebi said in a circular.
The Trusts will have to make disclosures about half- yearly and annual financial information as well as unit holding pattern. Also, they would have to ensure that adequate steps are taken for expeditious redressal of investor complaints.
Securities and Exchange Board of India (Sebi) had last month issued disclosure norms that need to be followed by InvITs while filing the offer documents and the new norms have been added in the latest round today.
Prior to that, Sebi’s board in September had decided to relax certain InvITs norms in a bid to make these instruments more attractive for raising capital.
Sebi had notified InvIT Regulations in 2014, allowing the setting up and listing of such Trusts, which are very popular in some advanced markets.
However, not a single Trust has been set up as yet as investors wanted further measures, including tax breaks, to make these instruments more attractive. Sebi has granted approval to IRB Infrastructure, GMR, MEP Infrastructure and Reliance Infrastructure to launch InvITs.
The InvIT will have to submit a statement “indicating deviations, if any, in the use of proceeds from the objects stated in the offer document/placement memorandum or explanatory statement to the notice for general meeting, as applicable,” to exchange on a quarterly basis for any private issue, public issue, rights issue and preferential issue.
“Every credit rating, wherever required to be obtained by an InvIT…shall be reviewed once a year, by the registered credit rating agency,” Sebi said.
InvIT will have to furnish an explanation for the variation in its annual report. They will have to disclose its unit holding pattern for each class of unit holder to the stock exchanges.
They will have to maintain proper books of account, records and documents relating to a period of not less than eight financial years immediately preceding a financial year, or where the InvIT had been in existence for a period of less than eight years, in respect of all the preceding years.
InvIT will have to submit its half yearly and annual financial information to exchanges. This information should be in accordance with Indian Accounting Standards (Ind AS).
The financial information of the first half of the fiscal year, would have to be submitted within 45 days from the end of the half year, while annual financial information would be submitted within 60 days from the end of the financial year.
Financial statements would have to disclose all ‘material’ items, which can influence the economic decisions.
Sebi said that InvIT would have to make disclosure about net distributable cash flows, as well as of all the underlying holding companies and special purpose vehicle (SPVs). PTI SP SA
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