Market Regulator Shortens Cooling-Off Period for Private Listed Infrastructure Trusts

The Securities and Exchange Board of India has revised the Offer for Sale (OFS) cooling-off period for illiquid private listed Infrastructure Investment Trusts (InvITs) to plus or minus eight weeks. This regulatory adjustment is implemented through an amendment to the December 2024 Master Circular published by the regulator. The updated rule applies with immediate effect to eligible private listed infrastructure vehicles facing liquidity constraints in the secondary market. In capital market regulation, cooling-off periods restrict subsequent share or unit sales within specific timeframes to prevent market manipulation and stabilize valuations during secondary transactions.

For illiquid instruments, rigid restriction windows can trap capital and restrict portfolio rebalancing for institutional unitholders. By adjusting the cooling-off window to plus or minus eight weeks, the updated mandate under the amended December 2024 Master Circular provides unitholders with enhanced flexibility. The previous framework imposed longer mandatory gaps between successive OFS transactions, whereas the revised directive accelerates the permissible timeline for executing liquidity events. Fund managers, compliance officers, and financial advisors must update their transaction calendars to reflect the new plus or minus eight weeks OFS cooling-off period for illiquid private listed InvITs.

Compliance teams should review the amended December 2024 Master Circular to ensure all procedural safeguards surrounding secondary unit sales remain fully satisfied. Stakeholders must track any supplementary clarifications issued by the Securities and Exchange Board of India regarding liquidity categorization metrics. Bottom line: Portfolio managers gain greater flexibility in executing secondary block transactions under this revised timeline.