TaxTMI 
TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2024
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....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 inserted, namely, ─ "CHAPTER IVB FRAMEWORK FOR UNIT BASED EMPLOYEE BENEFIT SCHEME Applicabilit....
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....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. (4) The employee benefit trust may subscribe to the units of the InvIT subject to compliance with the minimum lot for primary market transaction specified under these regulations: Provided that the minimum trading lot specified under these regulations shall not be applica....
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....oyee 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; (b) issuance of units to the employee benefit trust only once in a financial year, within ninety days after the completion of the annual valuation exercise; (c) issuance of units to the employee benefit trust shall be made in compliance with the guidelines for preferential issue of units specified by the Board: (d) allotting such units directly to the employee benefit trust so that such units are used exc....
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....he 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 existing units are listed, subject to the following conditions: (a) The unit based employee benefit scheme is in compliance with these regulations; (b) A statement, as specified in Part D of Schedule IX of these regulations, is filed and the investment manager obtains an in-principle approval from the recognised stock exchange(s); (c) As and when an exercise is made, the investment manager notifies the concerned recognised stock exchange(s) as per the statement as specified in Part E of Schedule IX of these regulations. Trustee of the employee benefit trus....
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....ired 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 offered unless the disclosures as specified in Part G of Schedule IX of these regulations are made by the investment manager to the prospective option grantees. (7) The investment manager implementing unit based employee benefit scheme shall follow the requirements including the disclosure requirements of the Accounting Standards prescribed by the Central Government in terms of section 133 of the Companies Act, 2013 including any 'Guidance Note on Accounting for employee share-based Payments' issued in that regard from time to time. (8) The investment manager granting options to its employees pursuant to a unit based employee benefit scheme shall be free to determine the exercise price subject to conforming to the acco....
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....ulation 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 the employee benefit trust as specified in clause (a) of sub-regulation (1) of regulation 17I; (k) transfer of units to the employee benefit trust as specified in clauses (b) and (c) of subregulation (1) of regulation 17I; (l) a separate resolution that shall be required for grant of options to identified employees, during any one year, equal to or exceeding one per cent of the unit capital of the InvIT at the time of grant of options; (m) variation of the terms of the unit based employee benefit scheme including repricing of the options;" V. After schedule VIII, the following new schedule shall be inserted, namely, - "Schedule - IX Part A - Minimum Provisions in Trust Deed [See regulation 17H(4)] The trust deed shall, inter alia, provide the following: 1. Details of the trust, including: (i) Name of the trust; (ii) Object of the trust; (iii) Details of settlor; (iv) D....
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.... price of options shall be adjusted in a manner such that total value to the employee of the options remains the same after the corporate action; ii. the vesting period and the life of the options shall be left unaltered as far as possible to protect the rights of the employee(s) who is granted such options; g. the grant, vesting and exercise of options in case of employees who are on long leave; and h. the procedure for funding the exercise of options Part C - Contents of the explanatory statement to the notice and resolution for unitholders meeting [See regulations 17M (4) and 17Q (9)] The explanatory statement to the notice and the resolution proposed to be passed for the unit based employee benefit schemes shall, inter alia, contain the following information: a. brief description of the scheme(s); b. the total number of options to be offered and granted; c. identification of classes of employees entitled to participate and be beneficiaries in the scheme(s); d. requirements of vesting and period of vesting; e. maximum period (subject to these regulations) within which the options shall be vested; f. exercise price, purchase price or pricing formula; g. e....
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.... of time within the exercise period? Yes/No 20. Whether scheme provides for the procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of any corporate actions? Clause in scheme describing such adjustment. 21. Description of the appraisal process for determining the eligibility of employees under the scheme. 22. The specified time period within which vested options are to be exercised in the event of termination or resignation of an employee. 23. The specified time period within which options to be exercised in the event of death of the employee. 24. Whether the scheme provides for conditions under which options vested in employees may lapse in case of termination of employment for misconduct? Clause in Scheme describing such adjustment. 25. Whether scheme provides for conditions for the grant, vesting and exercise of options in case of employees who are on long leave? Clause in scheme describing such adjustment. 26. Whether amount paid/payable by the employee at the time of the grant, vesting or exercise of the options will be forfeited if the employee does not exercise the same within the exercise period? Clause in ....
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....lations, 2015 or any modification or re-enactment thereto. Signatures Pursuant to the requirements of the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014, the investment manager certifies that it has reasonable grounds to believe that it meets all the requirements for the filing of this form and has duly caused this statement to be signed on its behalf by the undersigned, thereunto, duly authorized Name of the investment manager Name of the Compliance Officer Designation Date: Place: Part E - Format of notification for issue of units [See regulation 17N(1)(c)] 1. Name of InvIT and address of Registered Office: 2. Name of the recognised Stock Exchanges on which the units of InvIT are listed: 3. Filing date of the statement referred in regulation 17N(1)(b) of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 with the recognised Stock Exchange: 4. Filing Number, if any : 5. Title of the Scheme pursuant to which units are issued, if any: 6. Kind of security to be listed : 7. Date of issue of units : 8. Number o....
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....whose exercise price either equals or exceeds or is less than the market price of the units. (v) Employee wise details (name of employee, designation, number of options granted during the year, exercise price) of options granted to - (a) senior managerial personnel as defined under clause (d) of sub-regulation (1) of regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; (b) any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year; and (c) identified employees who were granted option, during any one year, equal to or exceeding 1% of the unit capital of the InvIT at the time of grant. (vi) A description of the method and significant assumptions used during the year to estimate the fair value of options including the following information: (a) the weighted-average values of unit price, exercise price, expected volatility, expected option life, expected dividends, the risk-free interest rate and any other inputs to the model; (b) the method used and the assumptions made to incorporate the effects of expected early exercise; (c) how....
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....nexercised options may be forfeited if the employee is terminated for gross misconduct. B: Information about the InvIT 1. Business of the InvIT: A description of the main objects and present business of the InvIT. 2. Abridged financial information: Abridged financial information, for the last five years for which audited financial information is available, as specified by the Board from time to time. The last audited accounts of the InvIT shall also be provided unless this has already been provided to the employee in connection with a previous option or grant or otherwise. 3. Risk Factors: Management perception of the risk factors for the InvIT. 4. Continuing disclosure requirement: The option grantee shall be provided copies of all documents that are sent to the unitholders of the InvIT. This shall include the annual accounts of the InvIT as well as notices of meetings and the accompanying explanatory statements. C: Salient Features of the Scheme This Part shall contain the salient features of the scheme of the investment manager including the conditions regarding vesting, exercise, adjustment for corporate actions, and forfeiture of vested options. It shall not be neces....