CS Professional · Strategic Management and Corporate Finance · Infrastructure Investment Trusts
Which of the following arrangements regarding the trustee of an InvIT is permitted under the SEBI InvIT Regulations?
The permitted arrangement is a SEBI-registered debenture trustee that is not an associate of the sponsor or investment manager. The trustee supervises these parties, so independence is required, and the sponsor, the manager or their associates cannot act as trustee.
- AA SEBI-registered debenture trustee that is not an associate of the sponsor or investment managerCorrect
- BThe sponsor acting as trustee for convenience
- CThe investment manager also acting as trustee
- DA trustee who is an associate of the sponsor, if it holds less than 10% of units
Explanation
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 separation keeps oversight independent. The other options merge or link the trustee with the parties it must supervise, which is not allowed.
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