Regulation 49P - Permissible investments - Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

1 [Permissible investments. 49P. (1) Every infrastructure debt fund scheme shall invest at least ninety percent of the net assets of the scheme in the debt securities or securitized debt instruments of infrastructure companies or projects or special purpose vehicles which are created for the purpose of facilitating or promoting investment in infrastructure or bank loans in respect of completed and revenue generating projects of infrastructure companies or special purpose vehicle 2 [:] 3 [Provided that the funds received on account of re-payment of principal, whether by way of pre-payment or otherwise, with respect to the underlying assets of the scheme, shall be invested as specified in this sub-regulation: Provided further that if the investments specified in this sub-regulation are not available, such funds may be invested in bonds of Public Financial Institutions and Infrastructure Finance Companies.] (2) Subject to sub-regulation (1), every infrastructure debt fund scheme may invest the balance amount in equity shares, convertibles including mezzanine financing instruments of companies engaged in infrastructure, infrastructure development projects, whether listed on a recognized stock exchange in India or not; or money market instruments and bank deposits. (3) The investment restrictions shall be applicable on the life-cycle of the infrastructure debt fund scheme and shall be reckoned with reference to the total amount raised by the infrastructure debt fund scheme. (4) No mutual fund shall, under all its infrastructure debt fund schemes, invest more than thirty per cent of its net assets in the debt securities or assets of any single infrastructure company or project or special purpose vehicles which are created for the purpose of facilitating or promoting investment in infrastructure or bank loans in respect of completed and revenue generating projects of any single infrastructure company or project or special purpose vehicle. (5) An infrastructure debt scheme shall not invest more than 30% of the net assets of the scheme in debt instruments or assets of any single infrastructure company or project or special purpose vehicles which are created for the purpose of facilitating or promoting investment in infrastructure or bank loans in respect of completed and revenue generating projects of any single infrastructure company or project or special purpose vehicle 4 [.] 5 [***] 6 [(5A) The overall investments by an infrastructure debt fund scheme in debt instruments or assets of infrastructure companies or projects or special purpose vehicles, which are created for the purpose of facilitating or promoting investment in infrastructure or bank loans in respect of completed and revenue generating projects of infrastructure companies or projects or special purpose vehicles, which are rated below investment grade or are unrated, shall not exceed 30% of the net assets of the scheme: Provided that the overall investment limit may increase up to 50% of the net assets of the scheme with the prior approval of the trustees and the board of the asset management company.] (6) No infrastructure debt fund scheme shall invest in (i) Any unlisted security of the sponsor or its associate or group company; (ii) Any listed security issued by way of preferential allotment by the sponsor or its associate or group company; (iii) Any listed security of the sponsor or its associate or group company or bank loan in respect of completed and revenue generating projects of infrastructure companies or special purpose vehicles of the sponsor or its associate or group companies, in excess of twenty five per cent of the net assets of the scheme, subject to approval of trustees and full disclosures to investors for investments made within the aforesaid limits; or 7 [(iv) any asset or securities owned by the sponsor or asset management company or their associates in excess of 30% of the net assets of the scheme, provided that- (a) such investment is in assets or securities not below investment grade; (b) the sponsor or its associates retains atleast 30% of the assets or securities, in which investment is made by the scheme, till the assets or securities are held in the scheme portfolio; and (c) approval for such investment is granted by the trustees and full disclosures are made to the investors regarding such investment.] ************* NOTES:- 1 Chapter VI-B consisting of sections 49L to 49T, inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2011, w.e.f. 30-8-2011. 2 Substituted for . by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. 3 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. 4 Substituted for : by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. The words which are rated below investment grade or unrated were omitted by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. 5 Omitted by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. Prior to this, it read as, Provided that such investment limit may be extended upto 50% of the net assets of the scheme with the prior approval of the board of trustees and the board of asset management company. 6 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. 7 Substituted by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. Prior to substitution, clause (iv) read as follows: Any asset or securities owned by the sponsor or asset management company or its associates, in excess of 20% of the net assets of the scheme not below investment grade, subject to approval of trustees and full disclosures to investors for investments made within the aforesaid limits.