SEBI approves real estate mutual fund guidelines
26 Jun 2006
The Securities and Exchange Board of India (Sebi) at its meeting on Monday approved the guidelines for real estate mutual funds (REMFs), which would allow investors to buy and trade shares in the realty sector.
The market regulator has defined real estate mutual fund scheme as a scheme with an objective to invest directly or indirectly in real estate property, which shall be governed by the provisions and guidelines under Sebi (Mutual Funds) Regulations.
The REMFs, initially, shall be close ended. The units have to be compulsorily listed on the stock exchanges and the NAV of the scheme declared daily.
The REMFs shall appoint a custodian who will act as the Sebi-authorised registrar. The custodian shall safekeep the title of real estate properties held by the REMFs.
These schemes can invest in real estate properties within India, mortgage (housing lease) backed by securities, equity shares/bonds/debentures of listed/unlisted companies which deal in properties and also undertake property development and in other securities, the Sebi release said.
The market regulator also announced changes in the lock-in period for venture capital funds and initial public offers (IPOs).
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