SEBI Updates Disclosure Norms for InvITs: Key Changes & Compliance Insights

SEBI amendments to the Master Circular for InvITs, focusing on investor complaints review and disclosure timelines. Ideal for NISM Exam Preparation with MCQs included.

The Securities and Exchange Board of India (SEBI) issued a circular on August 22, 2024, introducing amendments to the Master Circular for Infrastructure Investment Trusts (InvITs) dated May 15, 2024. These amendments pertain to the review and disclosure procedures for the statement of investor complaints and the timeline for disclosure of deviations in the use of proceeds from the stated objectives.

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Key Points:

1. Background:
   • SEBI's Circular dated November 29, 2016, laid down provisions for continuous disclosures by InvITs. These provisions were consolidated into Chapter 4 of the Master Circular on May 15, 2024.
   • A working group was established by SEBI to recommend measures to enhance ease of doing business for InvITs and REITs.
2. Review of Investor Complaints:
   • Originally, investor complaints, including those recorded in SCORES, were required to be disclosed and reviewed by the Trustee and the Board of Directors before submission to stock exchanges.
   • The amendment aligns the review process with SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. The revised requirement mandates that the statement of investor complaints be reviewed quarterly by the Board and Trustee, not prior to submission.
3. Timeline for Disclosure of Deviation(s):
   • Previously, the statement of deviations in the use of proceeds had to be submitted to stock exchanges within 21 days of each quarter's end.
   • The new amendment requires this statement to be submitted along with the financial results, aligning with the LODR Regulations.
4. Applicability:
   • The circular and its amendments are effective immediately upon issuance.
5. Authority and Dissemination:
   • The circular is issued under SEBI's powers and mandates that stock exchanges disseminate its contents on their websites.

NISM Exam Prep Basic Multiple-Choice Questions (MCQs)

1. What is the key purpose of the SEBI circular issued on August 22, 2024 related to InvITs?
   • A) To introduce new regulations for stock exchanges
   • B) To amend the Master Circular for InvITs regarding investor complaints and disclosure timelines
   • C) To update SCORES complaint procedures
   • D) To implement new listing requirements for REITs
   • Answer: B
2. Which regulation does the amendment align with for the review of investor complaints?
   • A) SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
   • B) SEBI (Prohibition of Insider Trading) Regulations, 2015
   • C) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
   • D) SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
   • Answer: C
3. What is the revised timeline for submitting the statement of deviations?
   • A) Within 21 days from the end of each quarter
   • B) Along with the submission of financial results
   • C) At the end of the financial year
   • D) Immediately after Board approval
   • Answer: B
4. Who is responsible for reviewing the statement of investor complaints before it is submitted to the stock exchanges?
   • A) Only the Trustee
   • B) The Board of Directors and the Trustee
   • C) The Investment Manager only
   • D) No prior review is required
   • Answer: B
5. Under which section of the SEBI Act, 1992, was this circular issued?
   • A) Section 10(1)
   • B) Section 11(1)
   • C) Section 12(1)
   • D) Section 9(1)
   • Answer: B

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