Regulation 19 - Related party transactions - Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014

Related party transactions 19. (1) All related party transactions shall be on an arms-length basis in accordance with relevant accounting standards, in the best interest of the unit holders, consistent with the strategy and investment objectives of the InvIT. (2) All related party transactions of an InvIT shall be disclosed, (a) in the offer document or placement memorandum with respect to any such transactions entered into prior to the offer of units and any such proposed transactions subsequent to the offer; (b) to the designated stock exchanges and unit holders periodically in accordance with the listing agreement and these regulations. (3) With respect to related party transactions with respect to 1 [***] InvITs entered into after initial 2 [public] offer, if, (a) the total value of all the related party transactions, in a financial year, pertaining to acquisition or sale of assets 3 [whether directly or through holdco or through SPV,] or investments into securities exceeds five per cent. of the value of 4 [the] InvIT 5 [assets]; or (b) the value of the funds borrowed from related parties, in a financial year, exceeds five per cent. of the total consolidated borrowings of the InvIT 6 [,holdco and the SPV(s)], approval from the unit holders shall be obtained prior to entering into any such subsequent transaction with any related party in accordance with regulation 22. (4) Transaction between two or more of the InvITs with a common investment manager or sponsor, shall be deemed to be related party transactions for each of the InvITs and provisions of regulation 19 shall apply: Provided that this sub-regulation shall also apply if the investment managers or sponsors of the InvITs are different entities but are associates. (5) With respect to any related party transaction, details of any fees or commissions received or to be received by 7 [such related party (ies)] shall be adequately disclosed to the designated stock exchanges. (6) Where any of the related parties have an interest in a business which competes or is likely to compete, either directly or indirectly, with the activities of the InvIT, the following details shall be disclosed in the offer document or placement memorandum, (a) details of the such business including an explanation as to how such business shall compete with the InvIT; (b) a declaration that the related party shall perform its duty in relation to the InvIT independent of its related business; (c) declaration as to whether any acquisition of such business by the InvIT is intended and if so, details of the same thereof. (7) The Board may specify additional guidelines with respect to related party transactions, as it deems fit. *************** NOTES:- 1 Omitted publicly offered by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 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 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 5 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 6 Inserted by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016 7 Substituted for any person or entity which is an associate of the related party by Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, w.e.f 30.11.2016