Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2025 - SEBI/LAD-NRO/GN/2025/240 - SEBI

SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 1st April 2025 SECURITIES AND EXCHANGE BOARD OF INDIA (INFRASTRUCTURE INVESTMENT TRUSTS) (AMENDMENT) REGULATIONS, 2025 No. SEBI/LAD-NRO/GN/2025/240 . In exercise of the powers conferred under section 30 read with sections 11 and 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 , namely: 1. These regulations may be called the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2025. 2. They shall come into force on the date of their publication in the Official Gazette. 3. In the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 , (1) in regulation 4 , in sub-regulation (2), in clause (e), in sub-clause (v), (a) the symbol ; shall be substituted with the symbol : ; and (b) the following proviso shall be inserted - Provided that if by a vacancy in the office of an independent director of the investment manager, the investment manager becomes non-compliant with such requirement, such vacancy shall be filled by the investment manager as follows A. if such vacancy arises due to expiry of the term of office of the independent director, then the resulting vacancy shall be filled not later than the date such office is vacated; or B. if such vacancy arises due to any other reason, then the resulting vacancy shall be filled at the earliest and not later than three months from the date of such vacancy. (2) in regulation 9 , after sub-regulation (22), the following sub-regulations shall be inserted, namely, (23) The trustee shall, (a) comply with the core principles defining its roles and responsibilities which shall encompass transparency, accountability, due diligence and compliance with these regulations; and (b) act impartially in their fiduciary capacity, prioritize protection of the interests of unitholders, ensure effective management oversight over the investment manager and the InvIT and maintain high standards of governance of the investment manager and the InvIT. Explanation : For the purposes of this sub-regulation, (a) An illustrative list of roles and responsibilities to guide the trustee is specified in Schedule X; and (b) The trustee shall adopt additional measures or responsibilities crucial for meeting the overarching principles of their role and responsibilities: Provided that this sub-regulation shall come into force on the one-hundred eightieth day from the date of the publication of Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2025 in the Official Gazette. (24) For the purpose of ensuring compliance with sub-regulation (23), the trustee may engage external consultants during the period of eighteen months from the date of the publication of Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2025 in the Official Gazette. (3) in regulation 12 , in sub-regulation (5), the following provisos and explanation shall be inserted, namely, - Provided that locked-in units held by a sponsor or its sponsor group entities may be transferred only amongst such sponsor or its sponsor group entities subject to the condition that lock-in on such units shall continue for the remaining period with the transferee and such transferee shall not be eligible to transfer such units till the lock-in period has expired. Explanation : In case of an InvIT with multiple sponsors, the locked in units held by a sponsor or its sponsor group entities can be transferred only amongst such sponsor or its own sponsor group entities and shall not be transferred to any other sponsor or their sponsor group entities. Provided further that in case of change in sponsor, locked-in units held by the outgoing sponsor or its sponsor group entities may be transferred to the incoming sponsor or its sponsor group entities subject to the condition that the incoming sponsor or its group entities shall meet the minimum unitholding requirements after the transfer: Provided also that in case of conversion to self-sponsored investment manager, locked-in units held by the outgoing sponsor or its sponsor group entities may be transferred to the self-sponsored investment manager or its shareholders or group entities of self-sponsored investment manager subject to the condition that the self-sponsored investment manager or its shareholders or group entities of self-sponsored investment manager shall meet the minimum unitholding requirements after the transfer. (4) in regulation 18 , (a) in sub-regulation (5), in clause (b), i. in sub-clause (v), the words , liquid mutual funds shall be omitted; and ii. after sub-clause (v), the following clauses shall be inserted, namely, (vi) unlisted equity shares of a company which provides project management and other incidental services, subject to the following conditions: A. such services are provided exclusively to the InvIT, its HoldCo(s) and SPV(s); and B. the entire shareholding or interest in such company is held by the InvIT either directly or through its HoldCos or SPVs. (vii) units of liquid mutual funds schemes where the credit risk value is at least 12 and which fall under the Class A-I in the potential risk class matrix as specified by the Board; (viii) interest rate derivatives, including interest rate futures, forward rate contract and interest rate swap, subject to the following conditions: A. investment in interest rate derivative shall be solely to hedge an underlying interest rate risk in the existing borrowings which qualifies as an effective hedge as per the applicable Indian Accounting Standards; B. that such investment shall only be made as a user or a client of such interest rate derivative, and shall not be in the nature of market making; C. adequate disclosures regarding investment in interest rate derivative shall be made in the annual report; D. for valuation of the investment in interest rate derivative, norms applicable for Mutual Funds shall be followed; and E. the requirements applicable to the clients or users of interest rate derivatives, including those specified by the Reserve Bank of India, are complied with. (b) in sub-regulation (6), after clause (ba), the following clause shall be inserted, namely, (bb) cash flows generated by all InvIT assets shall be considered. (5) in regulation 20 , in sub-regulation (3), i. in clause (a), the words credit rating from shall be substituted with the words issuer credit rating of the InvIT from ; and ii. in clause (b), A. in sub-clause (i), the words, a. a credit rating of shall be substituted with the words issuer credit rating of the InvIT of , and b. for its consolidated borrowing and the proposed borrowing, shall be omitted; B. in sub-clause (iii), a. the words in the years preceding the financial year in which shall be substituted with the words as at the end of the quarter preceding the date on which ; b. the symbol ; shall be substituted with the symbol : ; and c. the following proviso shall be inserted, namely, Provided that for computing six continuous distributions, maximum one distribution per quarter shall be considered and the distributions shall be consistent with the distribution policy disclosed to the unitholders; (6) in regulation 26G , in explanation, in clause (v), the words except for the purpose of regulation 19(1) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as applicable to the investment manager under these regulations. shall be inserted after the words shall be read as independent director ; (7) in regulation 26H , in sub-regulation (1), i. the symbol . shall be substituted with the symbol : ; and ii. the following shall be inserted as a proviso, namely, Provided that if by a vacancy in the office of a director of the investment manager, the investment manager becomes non-compliant with such requirement, such vacancy shall be filled by the investment manager as follows - A. if such vacancy arises due to expiry of the term of office of the director, then the resulting vacancy shall be filled not later than the date such office is vacated; or B. if such vacancy arises due to any other reason, then the resulting vacancy shall be filled at the earliest and not later than three months from the date of such vacancy. (8) in schedule VII , in clause (c), the words investment manager shall be substituted with the words InvIT ; (9) after Schedule IX , the following shall be inserted as a schedule, namely, Schedule X Illustrative Roles and Responsibilities of Trustees [See regulation 9(23)] 1. Asset Management Oversight: The trustee shall: i. conduct regular physical inspections of InvIT assets; and ii. supervise the maintenance and compliance of assets with safety and operational standards. 2. Regulatory Compliance and Reporting: i. The trustee shall provide periodic confirmations to SEBI that trustees have not engaged in transactions involving the units of the InvIT they manage. ii. The trustee shall ensure that the investment manager submits information to the trustees including: a) List of unitholders on quarterly basis; b) Shareholding of InvIT in SPV, HoldCo and Investment entity and changes if any on a quarterly basis; c) Confirmation on compliance with leverage limit on a quarterly basis and at the time of acquisition and disposal of assets; d) Trustee may request for due diligence report or such other information in respect of any acquisition; e) Net worth compliance certificate from investment manager on a half yearly basis; f) Net worth compliance certificate of sponsor and investment manager from practicing Chartered Accountant on an annual basis; and g) Confirmation on the details of unclaimed distributions till the previous quarter. iii. The trustee shall ensure that the distribution of net distributable cash flow has been made by the investment manager in accordance with these regulations and the trust deed. iv. Where the trustee has reason to believe that the conduct of business of the InvIT is not in accordance with these regulations they shall forthwith take such remedial steps as are necessary by them and shall immediately inform the unitholders and the Board of the violation and the action taken by them. 3. Managerial Oversight: i. The trustee shall hold annual and as-needed meetings with the investment manager s senior management and the chairperson of the audit committee. 4. Information and Documentation: The trustee shall: i. request and review detailed reports and documents from the investment manager regarding the operational, financial, and compliance status of the InvIT; and ii. require investment manager to provide due diligence reports, net worth compliance certificates, and confirmations of unclaimed distributions. 5. Record-Keeping: The trustee shall: i. seek necessary records maintained by the investment manager for compliance with regulation 26(2) of these regulations; and ii. maintain comprehensive and systematic records of all trustee activities, decisions, and notable transactions to ensure accountability and ease of audit. 6. Ethics and Conflict of Interest: The trustee shall: i. ensure that the investment manager has not given any undue or unfair advantage to any associates or dealt with any of the associates of the investment manager in any manner detrimental to interest of the unitholders; ii. ensure that there is no conflict of interest between the manner of deployment of its net worth by the investment manager and the interest of the unitholders; iii. ensure that the investment manager manages the InvIT independently of other activities and have taken adequate steps to ensure that the interest of investors of the InvIT are not being compromised with other activities of the InvIT or the investment manager; and iv. abide by the Code of Conduct as specified in the Schedule VI of these regulations. 7. Auditing and Financial Review: The trustee shall: i. be accountable for, and be the custodian of, the funds and property of the respective InvIT and shall hold the same in trust for the benefit of the unitholders in accordance with these regulations and the provisions of trust deed; and ii. review the net worth of the investment manager on a half-yearly basis to ensure compliance with the threshold provided in these regulations on a continuous basis. 8. Due Diligence: i. The trustee shall exercise due diligence as under: A. General Due Diligence: The trustee shall: a) be discerning in the appointment of the directors on the Board of the investment manager; b) review the desirability or continuance of the investment manager if substantial irregularities are observed in the InvIT; c) ensure that the trust property is properly protected, held and administered by proper persons and by a proper number of such persons; d) ensure that all service providers are holding appropriate registrations from the Board or concerned regulatory authority; e) arrange for test checks of service contracts; and f) immediately report to the Board of any special developments in the trust. B. Specific due diligence: The trustee shall: a) obtain audit reports of the investment manager and the InvIT, its HoldCo(s) and SPV(s) at regular intervals from auditors appointed by the investment manager; b) obtain secretarial compliance reports from the investment manager; c) consider the reports of the auditor and secretarial compliance reports of InvIT at their board meetings for appropriate action; d) review the activity of the InvIT on a quarterly basis and place the report of the same before their Board of directors; e) consider the reports of the auditor and compliance reports of investment manager at their board meetings for appropriate action; f) maintain records and minutes of the Board of directors meetings of the trustee for the review of information pertaining to the InvIT; g) prescribe and adhere to a code of ethics by the trustee, investment manager and its personnel; and h) communicate in writing to the investment manager of the deficiencies and check on necessary measures taken by investment manager for the rectification of deficiencies. ii. The trustee shall also exercise due diligence on such matters as may be specified by the Board from time to time. PRAMOD RAO, Executive Director [ADVT.-III/4/Exty./03/2025-26] Footnotes: 1. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was published in the Gazette of India on September 26, 2014 vide No. LAD-NRO/GN/2014-15/10/1577. 2. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was subsequently amended by the a. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, vide No. SEBI/LAD/NRO/GN/2016-17/021, with effect from November 30, 2016. b. Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, vide No. SEBI/LAD/NRO/GN/2016-17/38, with effect from March 6, 2017. c. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2017, vide No. SEBI/LAD-NRO/GN/2017-18/024, with effect from December 15, 2017. d. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2018, vide No. SEBI/LAD-NRO/GN/2018/07, with effect from April 10, 2018. e. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2019, vide No. SEBI/LAD-NRO/GN/2019/10, with effect from April 22, 2019. f. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/05, with effect from March 02, 2020. g. Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020, vide No. SEBI/LAD-NRO/GN/2020/10, with effect from April 17, 2020. h. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/15, with effect from June 16, 2020. i. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/27, with effect from July 30, 2021. j. Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30, with effect from August 31, 2021. k. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/83, with effect from May 4, 2022. l. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/101 with effect from January 1, 2023. m. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/122 with effect from February 14, 2023. n. Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD NRO/GN/2023/137 with effect from July 4, 2023. o. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/145 with effect from August 16, 2023. p. Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/146 with effect from August 18, 2023 q. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Third Amendment) Regulations, 2023 vide notification No. SEBI/LAD-NRO/GN/2023/159 with effect from October 23, 2023. r. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2024 vide notification No. LAD-NRO/GN/2024/182 with effect from May 27, 2024. s. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2024 vide notification No. SEBI/LAD-NRO/GN/2024/192 with effect from July 13, 2024. t. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Third Amendment) Regulations, 2024 vide notification No. SEBI/LAD-NRO/GN/2024/207 with effect from September 27, 2024. u. Securities and Exchange Board of India (Investor Charter) (Amendment) Regulations, 2025 vide notification F No. SEBI/LAD-NRO/GN/2025/228 with effect from February 10, 2025.