Regulation 4 - Eligibility criteria - Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014

Eligibility criteria. 4. (1) For the purpose of the grant of certificate to 1 [a trust], the Board shall consider all matters relevant to the activities as an InvIT. (2) Without prejudice to the generality of the foregoing provisions, the Board shall consider the following, mandatory requirements namely, (a) the applicant is 2 [the sponsor on behalf of the] trust and the instrument of trust is in the form of a deed duly registered in India under the provisions of the Registration Act, 1908; (b) the trust deed has its main objective as undertaking activity of InvIT in accordance with these regulations and includes responsibilities of the trustee in accordance with regulation 9; (c) persons have been designated as sponsor(s), investment manager and trustee under these regulations and all such persons are separate entities; (d) with regard to sponsor(s) , (i) 3 [each sponsor 15 [ and sponsor group ] shall be clearly identified in the application of registration to the Board and in the offer document/ placement memorandum, as applicable]; 16 [ Provided that, for each sponsor group not less than one person shall be identified as a sponsor: Provided further that of the entities categorized as sponsor group, only the following entities may be considered: a) a person or entity who is directly or indirectly holding an interest or shareholding in any of the assets or SPVs or holdco(s) proposed to be transferred to the InvIT; b) a person or entity who is directly or indirectly holding units of the InvIT on post-issue basis; c) a person or entity whose experience is being utilized by the sponsor for meeting with the eligibility conditions required under sub-clause (iii) of clause (d) of sub-regulation (2) of regulation 4 of these regulations. ] (ii) each sponsor has, (1) a net worth of not less than ₹ 100 crore if it is a body corporate or a company; or (2) net tangible assets of value not less than ₹ 100 crore in case it is a limited liability partnership: 4 [***] (iii) Whether the sponsor or its associate has a sound track record in development of infrastructure or fund management in the infrastructure sector. 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; (e) with regard to the investment manager,- (i) the investment manager has a net worth of not less than rupees ten crore if the investment manager is a body corporate or a company or net tangible assets of value not less than ten crore rupees in case the investment manager is a limited liability partnership; 14 [ (ii) the investment manager has not less than five years of experience in fund management or advisory services or development in the infrastructure sector or the combined experience of the directors/partners/employees of the investment manager in fund management or advisory services or development in the infrastructure sector is not less than 30 years: Provided that for computing the combined experience, only the experience of the directors/partners/employees with more than 5 years of experience in fund management or advisory services or development in the infrastructure sector shall be considered. ] (iii) the investment manager has not less than two employees who have at least five years experience each, in fund management or advisory services or development in the infrastructure sector; (iv) the investment manager has not less than one employee who has at least five years experience in the relevant sub-sector(s) in which the InvIT has invested or proposes to invest; (v) the investment manager has not less than half of its directors in case of a company or members of the governing board in case of an LLP as independent and not directors or members of the governing board 5 [of an Investment Manager] of another InvIT; (vi) the investment manager has an office in India from where the operations pertaining to the InvIT is proposed to be conducted; (vii) the investment manager has entered into an investment management agreement with the trustee which provides for the responsibilities of the investment manager in accordance with regulation 10; (f) 6 [ the project manager has been identified and shall be appointed in terms of the project implementation/ management agreement: Provided that the project implementation agreement/ management agreement shall be submitted along with the draft offer document/ or the placement memorandum; (g) with regard to the trustee, (i) the trustee is registered with the Board under Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 and is not an associate of the sponsor(s) or 7 [investment] manager; and (ii) the trustee has such wherewithal with respect to infrastructure, personnel, etc. to the satisfaction of the Board and in accordance with circulars or guidelines as may be specified by the Board; 19 [ (h) subject to the provisions of Chapter IVA of these regulations, there shall be only one class of units and all units shall carry equal voting rights and distribution rights associated with such units. ] 4 [ **** ] 20 [ (i) the unitholder(s) holding not less than ten percent of the total outstanding units of the InvIT, either individually or collectively, shall - (i) be entitled to nominate one director on the board of directors of the Investment Manager, in such manner as may be specified by the Board: Provided that the director so nominated shall recuse from voting on any transaction where such nominee director or associate of such nominee director or the unitholder who nominated such nominee director or associate of such unitholder is a party; (ii) comply with stewardship code specified in Schedule VIII of these regulations. ] (i) 10 [***] (j) the applicant has clearly described at the time of registration, details pertaining to proposed activities of the InvIT; (k) the 11 [InvIT and parties to the InvIT] are fit and proper persons based on the criteria as specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008; (l) whether any previous application for grant of certificate made by the 12 [InvIT or the parties to the InvIT or their directors/members of governing board] has been rejected by the Board; (m) whether any disciplinary action has been taken by the Board or any other regulatory authority against the 13 [ InvIT or the parties to the InvIT or their directors/members of governing board ] under any Act or the regulations or circulars or guidelines made thereunder. ************** NOTES:- 1 Substituted ibid for the words an applicant . 2 Substituted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. Prior to the substitution it read as the applicant is a trust and the instrument of trust is in the form of a deed duly registered in India under the provisions of the Registration Act, 1908; 3 Substituted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. Prior to the substitution it read as there are not more than 3 sponsors . 4 Omitted Provided that 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; by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. 5 Inserted by the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 6 Substituted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. Prior to the substitution it read as 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: Provided that in case of PPP projects, such obligations shall be in accordance with the concession agreement or any such agreement entered into with the concessioning authority; 7 Inserted by the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 8 Substituted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. Prior to the substitution it read as no unit holder of the InvIT enjoys preferential voting or any other rights over another unit holder; 9 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. 10 Omitted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. Prior to the substitution it read as here shall not be multiple classes of units of InvITs; 11 Substituted for the words applicant, sponsor(s), investment manager, project manager(s) and trusts by the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 12 Substituted for the words applicant or any related party by the SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2017, w.e.f. 15.12.2017. 13 Substituted ibid for the words applicant or any related party . 14. Substituted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2020/05 dated 02-03-2020 before it was read as (ii) the investment manager has not less than five years experience in fund management or advisory services or development in the infrastructure sector; 15. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/145 dated 16-08-2023 16. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/145 dated 16-08-2023 17. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/145 dated 16-08-2023 before it was read as, ; 18. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/145 dated 16-08-2023 19. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/182 dated 27-05-2024 before it was read as, (h) no unit holder of the InvIT enjoys 8 [superior] voting or any other rights over another unit holder 9 [and there shall not be multiple classes of units of InvITs: Notwithstanding the above, subordinate units may be issued only to the sponsors and its associates, where such subordinate units shall carry only inferior voting or any other rights compared to other units 17 [ : ] ] 18 [ Provided that unitholder(s) holding not less than ten percent of the total outstanding units of the InvIT, either individually or collectively, shall be entitled to nominate one director on the board of directors of the Investment Manager, in the manner as may be specified by the Board: Provided further that the director so nominated shall recuse from voting on any transaction where such nominee director or associate of such nominee director or the unitholder who nominated such nominee director or associate of such unitholder is a party: Provided further that any unitholder holding not less than ten percent of the total outstanding units of the InvIT shall comply with stewardship code specified in Schedule VIII of these regulations. ] 20. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/182 dated 27-05-2024