SEBI Revises Investment Manager Eligibility Norms

The Securities & Exchange Board of India (SEBI) has revised its investment manager eligibility norms for Infrastructure Investment Trusts (InvITs), it has been announced.

The SEBI has also permitted fast-track rights issue by Real Estate Investment Trust (REIT) and InvITs without filing draft offer document.

As per the SEBI’s revised norms, investment managers need to have an experience of more than five years in fund management or advisory services or development in the infrastructure sector.

The latest norms are the result of the SEBI amending the Securities & Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 and Securities & Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014.

The SEBI regulations were amended after the its board meeting on February 17, 2020, decided to amend its investment manager eligibility norms for InvITs and permit fast-track issuance of units to existing investors in REITs and InvITs.

As per the amended norms, the SEBI has also allowed a combined relevant experience of at least 30 years of directors, partners and employees of investment managers, even if it is a newly created entity.

It may be noted that at present, InvIT norms require the investment manager to have at least 5 years of experience in fund management or advisory services or development in the infrastructure sector. Also, investment managers must have at least two employees, each with five years of experience in the infrastructure sector.

The SEBI’s latest norms also mandate that REIT and InvIT will not be required to file draft offer document with the regulator in case of a fast-track rights issue, subject to the fulfillment of conditions as specified by the SEBI from time to time.