Regulation 10 - Rights and responsibilities of investment manager - Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014

Rights and responsibilities of investment manager 10. (1) The investment manager shall make the investment decisions with respect to the underlying assets or projects of the InvIT including any further investment or divestment of the assets. (2) The investment manager shall oversee activities of the project manager with respect to 1 [compliance with these regulations] and the 2 [project implementation agreement/] project management agreement and shall obtain compliance certificate from the project manager, in the form as may be specified, on a quarterly basis. (3) The investment manager shall ensure that the infrastructure assets of the InvIT or 3 [holdco or] SPV have proper legal titles, if applicable, and that all the material contracts entered into on behalf of InvIT or SPV are legal, valid, binding and enforceable by and on behalf of the InvIT or SPV. (4) The investment manager shall ensure that the investments made by the InvIT are in accordance with the investment conditions specified in regulation 18 and in accordance with the investment strategy of the InvIT. (5) The investment manager, in consultation with trustee, shall appoint the valuer(s), auditor, registrar and transfer agent, merchant banker, custodian and any other intermediary or service provider or agent as may be applicable with respect to activities pertaining to the InvIT in a timely manner and in accordance with these regulations. 20 [ (6) Subject to the provisions of this chapter, the investment manager of the InvIT shall appoint an individual or a firm as the auditor, who shall hold office from the date of conclusion of the annual meeting in which the auditor has been appointed till the date of conclusion of the sixth annual meeting of the unitholders in accordance with the procedure for selection of auditors, as may be specified by the Board. ] 21 [ (6A) The investment manager of the InvIT shall not appoint or re-appoint- (a) an individual as the auditor for more than one term of five consecutive years; and (b) an audit firm as the auditor for more than two terms of five consecutive years: Provided that- (i) the individual auditor who has completed the term under clause (a) shall not be eligible for re-appointment as the auditor in the same InvIT for a period of five years from the date of completion of the term; (ii) the audit firm that has completed its term under clause (b), shall not be eligible for reappointment as the auditor in the same InvIT for a period of five years from the date of completion of its term. ] (7) The investment manager shall arrange for adequate insurance coverage for the 4 [InvIT assets]: Provided that this shall not apply in case the 5 [InvIT] assets are required to be insured by any other person under any agreement including a concession agreement or under any Act or regulations or circulars or guidelines of any concessioning authority or government or local body: Provided further that in 6 [case any of the InvIT assets are held] by 7 [holdco or] SPV, the investment manager shall ensure that assets held by the 8 [holdco or] SPV are adequately insured. (8) The investment manager shall ensure that it has adequate infrastructure and sufficient key personnel with adequate experience and qualification to undertake management of the InvIT at all times. (9) The investment manager 9 [and the merchant banker(s)] shall be responsible for all activities pertaining to issue of units and listing of units of the InvIT including, a. filing of placement memorandum with the Board; b. filing the 10 [of the] offer document with the Board and the exchanges within the prescribed time period; c. dealing with all matters up to allotment of units to the unit holders; d. obtaining in-principle approval 11 [and final listing and trading approvals] from the designated stock exchanges; e. dealing with all matters relating to issue and listing of the units of the InvIT as specified under Chapter IV and any guidelines as may be issued by the Board in this regard. (10) The investment manager 12 [and the merchant bankers(s)], shall ensure that disclosures made in the offer document or placement memorandum contains material, true, correct and adequate disclosures and are in accordance with these regulations and guidelines or circulars issued hereunder. (11) The investment manager shall declare distributions to the unit holders in accordance with sub-regulation (6) and (7) of regulation 18. (12) The investment manager shall review the transactions carried out between the project manager and its associates and where the project manager has advised that there may be a conflict of interest, shall obtain confirmation from the 13 [practicing chartered accountant or the valuer, as applicable,] that such transaction is on arm's length basis. (13) The investment manager shall ensure adequate and timely redressal of all unit holders' grievances pertaining to activities of the InvIT. (14) The investment manager shall ensure that the disclosures or reporting to the unit holders, Board, trustees and designated stock exchanges, are in accordance with these regulations and guidelines or circulars issued hereunder. (15) The investment manager shall provide to the Board and to the designated stock exchanges, where applicable, any such information as may be sought by the Board or the designated stock exchanges pertaining to the activities of the InvIT. (16) The investment manager or its associates shall not obtain any commission or rebate or any other remuneration, by whatever name called, arising out of transactions pertaining to the InvIT other than as specified in the offer document or placement memorandum or any other document as may be specified by the Board for the purpose of issue of units. (17) The investment manager shall ensure that the valuation of the InvIT assets is done by the valuer(s) in accordance with regulation 21. (18) The investment manager shall submit to the trustee,- a. quarterly reports on the activities of the InvIT including receipts for all funds received by it and for all payments made, position on compliance with these regulations, specifically compliance with regulations 18, 19 and 20, performance report, status of development of under-construction projects, within thirty days of end of such quarter; b. valuation reports as required under these regulations within fifteen days of the receipt of the valuation report from the valuer; c. decision to acquire or sell or develop or bid for any asset or project or expand existing completed assets or projects along with rationale for the same; d. details of any action which requires approval from the unit holders as maybe required under the regulations; e. details of any other material fact including change in its directors, change in its shareholding, any legal proceedings that may have a significant bearing on the activity of the InvIT, within seven working days of such action. (19) In case the investment manager fails to timely submit to the trustee information or reports as specified under sub-regulation (18) above or sub-regulation (9) of regulation 9, the trustee shall intimate the same to the Board and the Board may take action, as it deems fit. (20) The investment manager shall coordinate with trustee, as may be necessary, with respect to operations of the InvIT. (21) The investment manager shall ensure that computation and declaration of NAV of the InvIT based on the valuation done by the valuer 14 [, shall be disclosed to the stock exchange(s),] not later than fifteen days from the date of valuation. (22) The investment manager shall ensure that the audit of accounts of the InvIT by the auditor is done not less 15 [once in a year] and such report is submitted to the 16 [***] stock exchange 17 [s] within 18 [sixty] days of end of financial year ending March 31st 19 [***]. (23) The investment manager may appoint a custodian in order to provide such custodial services as may be authorised by the trustees. (24) The investment manager shall place before its board of directors in case of company or the governing board in case of an LLP a report on activity and performance of the InvIT at least once every quarter within thirty days of end of every quarter. (25) The investment manager shall designate an employee or director as the compliance officer for monitoring of compliance with these regulations and guidelines or circulars issued hereunder and intimating the Board in case of any non-compliance. (26) The investment manager shall convene meetings of the unit holders in accordance with regulation 22 and maintain records pertaining to the meetings in accordance with regulation 26. (27) The investment manager shall ensure that all activities of the intermediaries or agents or service providers appointed by the investment manager are in accordance with these regulations and guidelines or circulars issued hereunder. 22 [ (28) The investment manager may at its discretion, offer unit based employee benefit scheme for its employees based on the units of the InvIT subject to compliance with the provisions of Chapter IVB of these regulations ] *************** NOTES:- 1 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 investment manager shall oversee activities of the project manager with respect to revenue streams from the projects and the project management agreement and shall obtain compliance certificate from the project manager, in the form as may be specified, on a quarterly basis. 2 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. 3 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 4 Substituted for the words assets of the InvIT by the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 5 Inserted by the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 6 Substituted ibid for the words case of assets held . 7 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 8 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 9 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 10 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 filing the draft and final offer document with the Board and the exchanges within the prescribed time period; 11 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016. 12 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 13 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 investment manager shall review the transactions carried out between the project manager and its associates and where the project manager has advised that there may be a conflict of interest, shall obtain confirmation from the auditor that such transaction is on arm's length basis. 14 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 15 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 investment manager shall ensure that the audit of accounts of the InvIT by the auditor is done not less than twice annually and such report is submitted to the designated stock exchange within forty five days of end of financial year ending March 31st and half-year ending September 30th. 16 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 the investment manager shall ensure that the audit of accounts of the InvIT by the auditor is done not less than twice annually and such report is submitted to the designated stock exchange within forty five days of end of financial year ending March 31st and half-year ending September 30th. 17 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 18 Substituted for the words forty five by the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018. 19 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 the investment manager shall ensure that the audit of accounts of the InvIT by the auditor is done not less than twice annually and such report is submitted to the designated stock exchange within forty five days of end of financial year ending March 31st and half-year ending September 30th. 20. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/122 dated 14-02-2023 before it was read as, (6) The investment manager shall appoint an auditor for a period of not more than five consecutive years: Provided that the auditor, not being an individual, may be reappointed for a period of another five consecutive years, subject to approval of unit-holders in the annual meeting in accordance with regulation 22. 21. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/122 dated 14-02-2023 22. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/192 dated 09-07-2024