SEBI’s new disclosure norms increase offer document transparency

a. Infrastructure Investment Trusts

b. Investment infrastructure trusts

c. Investment India trust

d. India infrastructure trust

 

SEBI has placed disclosure norms in position for InvITs on 20th Oct 2016. The offer document will now contain financial information, related party transactions and past performances

• SEBI in the previous month decided to further relax InvITs norms in a bid to make the instrument more efficient for raising capital
• SEBI had notified InvIT regulations in 2014, permitting the setting up and listing of such trusts which are very popular in advanced markets
• No single trust has been set up yet as investors want further measures such as tax breaks to ensure instruments are more attractive
• SEBI said the official document will now contain financial information of past 3 financial years including balance sheet, profit and loss statement, income and expenditure and net assets and total returns.
• InvITs will also have to disclose commitments, contingent liabilities, earnings per unit, total debt, net worth and debt equity ratios before and after completion of issue
• Trust will have to make a statement about the history of interest and principal payments of InvIT and operating cash flow from the project for the past three years and interim period
• In the event of related party transactions involving acquisition or disposal of an InvIT asset, trust will have to part with information about the summer of the valuation report along with material obligations pertaining to the transaction and commissions got by any associates of the related party in relation to transaction.