Section 4 in Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014
4. Eligibility criteria.
(1)For the purpose of the grant of certificate to [a trust] [Substituted 'an applicant' by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).], the Board shall consider all matters relevant to the activities as an InvIT.(2)Without prejudice to the generality of the foregoing provisions, the Board shall consider the following, mandatory requirements namely,-(a)the applicant is [the sponsor on behalf of the] [Substituted 'a' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] trust and the instrument of trust is in the form of a deed duly registered in India under the provisions of the Registration Act, 1908;(b)the trust deed has its main objective as undertaking activity of InvIT in accordance with these regulations and includes responsibilities of the trustee in accordance with regulation 9;(c)persons have been designated as sponsor(s), investment manager and trustee under these regulations and all such persons are separate entities;(d)with regard to sponsor(s) ,-(i)[each sponsor shall be clearly identified in the application of registration to the Board and in the offer document/ placement memorandum, as applicable] [Substituted 'there are not more than 3 sponsors' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).];(ii)each sponsor has,-(1)a net worth of not less than Rs. 100 crore if it is a body corporate or a company; or(2)net tangible assets of value not less than Rs 100 crore in case it is a limited liability partnership:[***] [Omitted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](iii)Whether the sponsor or its associate has a sound track record in development of infrastructure or fund management in the infrastructure sector.Explanation. - For the purpose of this clause, `sound track record' means experience of at least 5 years and where the sponsor is a developer, at least two projects of the sponsor have been completed;(e)with regard to the investment manager,-(i)the investment manager has a net worth of not less than rupees ten crore if the investment manager is a body corporate or a company or net tangible assets of value not less than ten crore rupees in case the investment manager is a limited liability partnership;(ii)[ the investment manager has not less than five years of experience in fund management or advisory services or development in the infrastructure sector or the combined experience of the directors/partners/employees of the investment manager in fund management or advisory services or development in the infrastructure sector is not less than 30 years: [Substituted by Notification No. SEBI/LAD-NRO/GN/2020/05, dated 2.3.2020 (w.e.f. 26.9.2014).]Provided that for computing the combined experience, only the experience of the directors/partners/employees with more than 5 years of experience in fund management or advisory services or development in the infrastructure sector shall be considered.](iii)the investment manager has not less than two employees who have at least five years experience each, in fund management or advisory services or development in the infrastructure sector;(iv)the investment manager has not less than one employee who has at least five years experience in the relevant sub-sector(s) in which the InvIT has invested or proposes to invest;(v)the investment manager has not less than half of its directors in case of a company or members of the governing board in case of an LLP as independent and not directors or members of the governing board [of an Investment Manager] [Inserted by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).] of another InvIT;(vi)the investment manager has an office in India from where the operations pertaining to the InvIT is proposed to be conducted;(vii)the investment manager has entered into an investment management agreement with the trustee which provides for the responsibilities of the investment manager in accordance with regulation 10;(f)[ the project manager has been identified and shall be appointed in terms of the project implementation/ management agreement: [Substituted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).]Provided that the project implementation agreement/ management agreement shall be submitted along with the draft offer document/ or the placement memorandum;](g)with regard to the trustee,-(i)the trustee is registered with the Board under Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993 and is not an associate of the sponsor(s) or [Investment] [Inserted by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).] manager; and(ii)the trustee has such wherewithal with respect to infrastructure, personnel, etc. to the satisfaction of the Board and in accordance with circulars or guidelines as may be specified by the Board;(h)no unit holder of the InvIT enjoys [superior] [Substituted 'preferential' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] voting or any other rights over another unit holder [and there shall not be multiple classes of units of InvITs: [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).]Notwithstanding the above, subordinate units may be issued only to the sponsors and its associates, where such subordinate units shall carry only inferior voting or any other rights compared to other units;](i)[ ***] [Omitted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](j)the applicant has clearly described at the time of registration, details pertaining to proposed activities of the InvIT;(k)the [InvIT and parties to the InvIT] [Substituted 'applicant, sponsor(s), investment manager, project manager(s) and trusts' by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).] are fit and proper persons based on the criteria as specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008;(l)whether any previous application for grant of certificate made by the [InvIT or the parties to the InvIT or their directors/members of governing board] [Substituted 'applicant or any related party' by Notification No. SEBI/LAD-NRO/GN/2017-18/024, dated 15.12.2017 (w.e.f. 26.9.2014).] has been rejected by the Board;(m)whether any disciplinary action has been taken by the Board or any other regulatory authority against the [InvIT or the parties to the InvIT or their directors/members of governing board] [Substituted 'applicant or any related party' by Notification No. SEBI/LAD-NRO/GN/2017-18/024, dated 15.12.2017 (w.e.f. 26.9.2014).] under any Act or the regulations or circulars or guidelines made thereunder.
