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CS Professional · Strategic Management and Corporate Finance · Infrastructure Investment Trusts

The Regulations require the trustee of an InvIT to satisfy which of the following conditions?

The trustee must be registered with SEBI as a debenture trustee and must not be an associate of the sponsor or the investment manager. This keeps the trustee independent so it can protect unitholders' interests.

  1. AIt must be a sponsor-group company to ensure alignment of interests
  2. BIt must be registered with SEBI as a debenture trustee and must not be an associate of the sponsor or investment managerCorrect
  3. CIt must be a bank with net worth above Rs 500 crore
  4. DIt must be a promoter of the underlying project SPV

Explanation

The trustee must be registered with SEBI as a debenture trustee and cannot be an associate of the sponsor or investment manager, so as to maintain independence. A sponsor-group trustee or project SPV promoter would defeat this independence. The bank net worth condition is invented.

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