TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2024
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....lation (1), - i. after clause (o), the following new clause shall be inserted, namely, ─ "(oa) "employee unit option scheme" means a scheme under which the investment manager grants unit options to its employees through an employee benefit trust. Explanation. - For the above purpose, employees of the investment manager shall include all directors of the investment manager except independent directors." ii. after clause (zc), the following new clause shall be inserted: "(zca) "liquid asset" means cash, units of overnight or liquid mutual fund schemes, fixed deposits of scheduled commercial banks, government securities, treasury bills, repo on government securities and repo on corporate bonds." II. in regulation 10, after sub-regulation (27), the following new sub-regulation shall be inserted namely, - " (28) The investment manager may at its discretion, offer unit based employee benefit scheme for its employees based on the units of the InvIT subject to compliance with the provisions of Chapter IVB of these regulations" III. after chapter IVA and before chapter V, the following new chapter shall be inse....
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....sociate of the sponsor may also transfer full or part of the units held by them to the employee benefit trust; (c) The investment manager may transfer full or part of the units of InvIT held by it to the employee benefit trust; Explanation. - For the purpose of clauses (b) and (c), any transfer of units to the employee benefit trust shall be irrevocable and without any consideration in return i.e. shall constitute a gift to the employee benefit trust. (2) Subordinate units shall not be eligible for being transferred to the employee benefit trust or being made part of a unit based employee benefit scheme. (3) The cash accumulated by the employee benefit trust on account of distributions received on units of the InvIT held by such trust, income earned on the assets held by the employee benefit trust and receipt of exercise price from the employees of the investment manager on exercise of options, may be used by the employee benefit trust for acquiring units of the InvIT either from the secondary market or during any fresh issuance of units by the InvIT only for the purpose of using such units for unit based employee benefit scheme. (....
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....them during the period referred in sub-regulation (6). (8) The investment manager shall submit a list of its employees to the depositories along with relevant details of the employees including their Income Tax Permanent Account Number, in advance of at least seven working days (excluding the date of intimation and the date of start of the period during which the employee benefit trust plans to undertake secondary acquisition). (9) The depositories shall impose lock-in on the holdings of units of InvIT by such employees and the lock-in shall be released after the period during which the employee benefit trust plans to undertake secondary acquisition, as disclosed to the recognised stock exchanges and depositories, has elapsed. Manner of allotment of units to the employee benefit trust by the InvIT. 17K. (1) An investment manager of any InvIT that allots units to the employee benefit trust in lieu of management fees to the investment manager shall ensure the following: (a) obtaining the approval of unitholders as per sub-regulation (5) of regulation 22 of these regulations before issuance of units to the employee benefit trust....
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....itholders' approval. (4) The explanatory statement to the notice for passing a resolution for variation of terms of a unit based employee benefit scheme and the resolution proposed to be passed by the unitholders shall disclose complete details of the variation, the rationale therefor, details of any employees that may be the beneficiaries of such variation and information as specified in Part C of Schedule IX of these regulations or as otherwise specified by the Board. (5) The investment manager may reprice the options which are not exercised, whether or not they have been vested, if the scheme was rendered unattractive due to fall in the price of the units in the stock market: Provided that the investment manager shall ensure that such repricing is not detrimental to the interests of the employees and approval of the unitholders has been obtained for such repricing as per sub-regulation (5) of regulation 22 of these regulations. Listing. 17N. (1) In case a new issue of units is made under any unit based employee benefit scheme, units so issued shall be listed immediately on all recognised stock exchange(s) where the existin....
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....of offering unit based employee benefit scheme. (2) The employee benefit trust shall not undertake any transfer or sale of units of the InvIT held by it except for providing unit based employee benefits in accordance with this chapter. (3) The units of the InvIT transferred to the employee benefit trust shall be locked in by the depository and shall be released by the depository only for the transfer of units to the employees of the investment manager as per the unit based employee benefit scheme. (4) There shall be a minimum vesting period of one year for unit based employee benefit scheme. (5) The unappropriated inventory of units which are not backed by grants, acquired through secondary acquisition by the employee benefit trust, shall be appropriated within a reasonable period which shall not extend beyond the end of the subsequent financial year, or the second subsequent financial year: Provided that the extension up to the second subsequent financial year shall be subject to the approval of the nomination and remuneration committee of the investment manager. (6) No unit based employee benefit scheme shall be of....
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....nder a unit based employee benefit scheme as a part of its employee compensation and shall disclose the same in the Annual Report." IV. in regulation 22, in sub-regulation (5), after sub-clause (vi) of clause (f), the following new clauses shall be inserted, namely, - " (g) introduction of unit based employee benefit scheme after an initial offer; (h) unit based employee benefit scheme proposed at the time of initial offer; Explanation. - For any unit based employee benefit scheme proposed at the time of initial offer, the investment manager shall obtain the approval of the unitholders on such proposed scheme after listing of the InvIT and shall ensure that the scheme is not implemented until such approval is obtained; (i) acquisition of units by the employee benefit trust as specified in sub-regulation (3) of regulation 17I: Provided that approval by way of a separate resolution shall be required in case of secondary acquisition and such approval shall mention the percentage of secondary acquisition that could be undertaken subject to the limits specified under regulation 17J: (j) issuance of units to....
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....ormulate the detailed terms and conditions of the schemes which shall, inter alia, include the following provisions: a. the quantum of options per employee and in aggregate under a scheme; b. the conditions under which options may vest in employees and may lapse in case of termination of employment for misconduct; c. the exercise period within which the employee can exercise the options and that options would lapse on failure to exercise the same within the exercise period; d. the specified time period within which the employee shall exercise the vested options in the event of termination or resignation; e. the right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period; f. the procedure for making a fair and reasonable adjustment to the entitlement including adjustment to the number of options and to the exercise price in case of any corporate actions. In this regard, the following shall, inter alia, be taken into consideration by the nomination and remuneration committee: i. the number and price of options shall be adjusted in a manner such that to....
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.... amendment of the scheme. 2. Date of institution of the scheme/ amendment of the scheme. 3. Validity period of the scheme. 4. Date of notice of unitholders meeting for approving the scheme/for amending the scheme/for approving grants under regulation 22(5)(l) of these regulations. 5. Date of unitholders meeting approving the scheme/amending the scheme/approving grants under regulation 22(5)(l) of these regulations. 6. Kinds of benefit granted under the scheme. 7. Identity of classes of persons eligible under the scheme: (a) employees, (b) employees outside India, (c) directors, except independent directors. 8. Total number of units reserved under the scheme, as applicable. 9. Number of units entitled under the grant. 10. Total number of grants to be made. 11. Maximum number of options to be granted per employee per grant and in aggregate. 12. Exercise price or pricing formula. 13. Whether any amount is payable at the time of grant? If so, quantum of such amount. 14. Lock-in period under the scheme. 15. Vesting period under the scheme. 16. Maximum period within which the grant shall be vested. 17.....
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....approving grants under sub-regulation (5) of regulation 22 of these regulations certified by the Company Secretary / Compliance Officer. 4. List of sponsors as defined under these regulations. 5. Copy of latest Annual Report of the InvIT. 6. Certificate of Secretarial Auditor on compliance with these regulations. 7. Specimen copy of unit certificate, if applicable. 8. Any other relevant documents. Undertakings The undersigned investment manager hereby undertakes: 1. To file a post-effective amendment to this statement to include any material information with respect to the scheme of distribution not previously disclosed in the statement or any material change to such information in the statement. 2. To notify the concerned recognised stock exchanges on which the units of the InvIT are listed, of each issue of units pursuant to the exercise of options under the scheme mentioned in this statement, in the specified form, as amended from time to time. 3. That the investment manager shall conform to the accounting policies specified in regulation 17Q(7) of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014.....
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....port of the InvIT shall disclose any material change in the scheme(s) and whether the scheme(s) is / are in compliance with the regulations. Further, the following details, inter alia, shall be disclosed on the InvIT's website and a web-link thereto shall be provided in the annual report. A. Relevant disclosures in terms of the accounting standards prescribed by the Central Government in terms of section 133 of the Companies Act, 2013 (18 of 2013) including the 'Guidance note on accounting for employee share-based payments' issued in that regard from time to time. B. Details related to Unit Option Scheme (i) A description of each unit option scheme that existed at any time during the year, including the general terms and conditions of each unit option scheme, including - (a) Date of unitholders' approval (b) Total number of options approved under unit option scheme (c) Vesting requirements (d) Exercise price or pricing formula (e) Maximum term of options granted (f) Source of units (primary, secondary, gift or combination) (g) Variation in terms of options (ii) Me....
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....ed were incorporated into the measurement of fair value, such as a market condition. C. Details related to Trust (i) The following details, inter alia, in connection with transactions made by the Trust meant for the purpose of administering the schemes under the regulations are to be disclosed: (ii) General information on all schemes Sl. No. Particulars Details 1. Name of the Trust 2. Details of the Trustee 3. Any other contribution made to the Trust during the year (iii) Brief details of transactions in units by the Trust (a) Number of units held at the beginning of the year; (b) Number of units acquired during the year through (i) primary issuance (ii) secondary acquisition, also as a percentage of unit capital as at the end of the previous financial year, along with information on weighted average cost of acquisition per unit; (c) Number of units transferred to the employees; (d) Number of units held at the end of the year. (iv) In case of secondary acquisition of units by the Trust Number of ....
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....nditions regarding vesting, exercise, adjustment for corporate actions, and forfeiture of vested options. It shall not be necessary to include this Part if it has already been provided to the employee in connection with a previous grant and no changes have taken place in the scheme since then. If the scheme administrator provides advisory services to the grantees in connection with the exercise of options or sale of resulting units, such advice shall be accompanied by an appropriate disclosure of concentration and other risks. The scheme administrator shall conform to the code of conduct appropriate for such fiduciary relationships." BABITHA RAYUDU, EXECUTIVE DIRECTOR [ADVT.-III/4/Exty./280/2024-25] Footnotes: 1. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was published in the Gazette of India on September 26, 2014 vide No. LAD-NRO/GN/2014-15/10/1577. 2. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was subsequently amended by the - a) Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, vide No. SEBI....