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CIRCULAR F. No. 41/IFSCA/SEBI/REITs-InvITs/2020-21 October 21, 2020 To, All Stock Exchanges in the International Financial Services Centre Dear Sir/Madam, Sub: Infrastructure Investment Trusts (InvITs) in International Financial Services Centres (IFSCs) 1. The framework for listing and trading of Infrastructure Investment Trusts (InvITs) on a recognised stock exchange in International Financial Services Centres (IFSCs) has been provided by Securities and Exchange Board of India (SEBI) vide circular SEBI/HO/DDHS/DDHS/CIR/P/2020/174 dated September 16, 2020. 2. Based on the representations received from market participants, it has been decided to prescribe the following regulatory framework for InvITs in IFSCs: A. InvITs in IFSCs (a) Any person/entity from India (IFSC or outside IFSC) or a foreign jurisdiction (as defined in Annexure - I) desirous to operate as an InvIT in the IFSCs shall obtain registration with International Financial Services Centres Authority (IFSCA). (b) An InvIT is permitted to raise funds through: i. Public issue with units listed on a recognised stock exchange in IFSC; or ii. Private placement with units listed on a recognised stock exchange in IFSC; or iii. Private placement whose units are not proposed to be listed on any recognised stock exchange. in accordance with the requirements prescribed at Annexure - I of this circular. (c) The recognised stock exchange(s) in IFSC shall specify the detailed framework including on initial disclosure requirements in the offer document, continuous obligations and disclosure requirements, rights of unit holders, trading, clearing and settlement etc. for InvITs listed or proposed to be listed on a recognised stock exchange(s) in IFSC. The InvITs shall comply with the requirements prescribed by the recognised stock exchange(s). B. Listing of an InvIT listed in India or Permissible Jurisdiction (a) An InvIT may be allowed to list and trade on a recognised stock exchange in IFSC provided: i. The InvIT is listed in India (outside IFSC) or in a permissible jurisdiction as notified or may be notified by the Government of India from time to time pursuant to notification no. G.S.R. 669(E) dated September 18, 2019 in respect of sub-rule 1 of rule 9 of Prevention of Money- Laundering (Maintenance of Records) Rules, 2005; and ii. The InvIT is in compliance with the law of its home jurisdiction. (b) The application for listing of such InvITs shall be filed with the recognised stock exchange(s) in the format and manner prescribed by the stock exchange(s). (c) The recognised stock exchange(s) in IFSC may exempt the continuous obligations and disclosure requirements for InvITs (under clause B) listed on the recognised stock exchange(s) in IFSC, provided that the InvIT releases all information and documents in English to the recognised stock exchange(s) in IFSC at the same time as they are released to the home exchange where it has a primary listing. 3. The detailed framework for listing of InvITs in IFSC shall be prescribed by the recognised stock exchanges in IFSC, pursuant to approval by IFSCA. 4. This circular is issued in exercise of powers conferred by section 12 of the International Financial Services Centres Authority Act, 2019 to develop and regulate the financial products, financial services and financial institutions in the International Financial Services Centres. 5. A copy of this circular is available on the website of International Financial Services Centres Authority at www.ifsca.gov.in. Yours faithfully, Arjun Prasad Deputy General Manager arjun.pd@ifsca.gov.in Annexure - I Infrastructure Investment Trusts (InvITs) Chapter I: Preliminary Definitions 1. The terms defined herein shall have the meanings assigned to them below, and their cognate expressions shall be construed accordingly,– a. "change in control" means,- (i) in case of a company or body corporate, change in control where 'control' shall have the meaning as provided in sub-section (27) of section 2 of the Companies Act, 2013; (ii) in any other case, change in the controlling interest; Explanation.─ For the purpose of sub-clause (ii), the expression “controlling interest” means an interest, whether direct or indirect, to the extent of not less than fifty percent of voting rights or interest; b. "eligible infrastructure project" means an infrastructure project which, prior to the date of its acquisition by, or transfer to, the InvIT, satisfies the following conditions,– (i) For PPP projects,– (a) the Infrastructure Project is a completed and revenue generating project, or (b) the Infrastructure Project, which has achieved commercial operations date and does not have the track record of revenue from operations for a period of not less than one year, or (c) the Infrastructure Project is a pre-COD project; (ii) In non-PPP projects, the infrastructure project has received all the requisite approvals and certifications for commencing construction of the project; c. "foreign jurisdiction" means a country, other than India, whose securities market regulator is a signatory to International Organization of Securities Commission’s Multilateral Memorandum of Understanding (IOSCO's MMOU) (Appendix A signatories) or a signatory to bilateral Memorandum of Understanding with the IFSCA, and which is not identified in the public statement of Financial Action Task Force as: i. a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply; or ii. a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies; d. “holdco” or “holding company” means a company or LLP.,- (i) in which InvIT holds or proposes to hold controlling interest and not less than fifty one per cent of the equity share capital or interest and which in turn has made investments in other SPV(s), which ultimately hold the infrastructure assets; (ii) which is not engaged in any other activity other than holding of the underlying SPV(s), holding of infrastructure projects and any other activities pertaining to and incidental to such holdings; e. “IFSC” or “International Financial Services Centre” shall have the same meaning as assigned to it in clause (q) of section 2 of the Special Economic Zones Act, 2005; f. “IFSCA” means the International Financial Service Centres Authority established under the International Financial Services Centres Authority Act, 2019 (50 of 2019); g. “investment management agreement” means an agreement between the trustee and the investment manager which lays down the roles and responsibilities of the investment manager towards the InvIT; h. “investment manager” means a company or LLP or body corporate which manages assets and investments of the InvIT and undertakes activities of the InvIT; i. “InvIT” or 'Infrastructure Investment Trust' shall mean the trust registered as such under these provisions; j. "InvIT assets” means assets owned by the InvIT, whether directly or through a holdco and/ or SPV, and includes all rights, interests and benefits arising from and incidental to ownership of such assets; k. “parties to the InvIT” shall include the sponsor(s), investment manager, project manager(s) and the trustee; l. “PPP project” means an infrastructure project undertaken on a Public- Private Partnership basis; m. “pre-COD project” means an infrastructure project which,– i. has not achieved commercial operation date as defined under the relevant project agreements including the concession agreement, power purchase agreement or any other agreement of a similar nature entered into in relation to the operation of a project or any agreement entered into with the lenders; and
