The Securities and Exchange Board of India, (SEBI) on July 09, 2024, issued a Consultation on Draft Circulars Amendment to Master Circulars for InvITs and REITs dated May 15, 2024.
The following has been stated-
•Para 22.3.1. (b) of Chapter 22, titled “Board nomination rights to unitholders of Infrastructure Investment Trusts (InvITs)”, of the Master Circular for Infrastructure Investment Trusts dated May 15, 2024 requires as under: “(b) Eligible Unitholder(s) shall be entitled to nominate only one Unitholder Nominee Director, subject to the unitholding of such Eligible Unitholder(s) exceeding the specified threshold. Suppose the right to nominate one or more directors on the Board of Directors of the Investment Manager is available to any entity (or to an associate of such entity) in the capacity of the shareholder of the Investment Manager or lender to the Investment Manager or the InvIT (or its HoldCo(s) or SPVs). In that case, such entity in its capacity as unitholder, shall not be entitled to nominate or participate in the nomination of a Unitholder Nominee Director.”
•Market participants have requested clarity on the availability of the right to nominate a director on the Board of Directors of the Investment Manager of InvIT, to a unitholder where such nomination right is also available to a unitholder in the capacity of a lender to the Investment Manager or the InvIT (or its HoldCo(s) or SPVs).
•Based on the industry's request and recommendation of the Hybrid Securities Advisory Committee (HySAC), it is proposed to insert the following proviso under paragraph 22.3.1. (b) of Master Circular for Infrastructure Investment Trusts dated May 15, 2024: “Provided that the above restriction relating to the right to nominate a Unitholder Nominee Director shall not be applicable if the right to appoint a nominee director is available in terms of clause (e) of sub-regulation (1) of regulation 15 of the SEBI (Debenture Trustees) Regulations, 1993.”
The comments and suggestions should be submitted by July 29, 2024, through the online web-based form which can be accessed using the link.
[Notification No. SEBI/HO/DDHS/DDHS-PoD/P/CIR/2024/___]
