Mutual funds can now invest in REITs, InvITs: Sebi

The move comes after Sebi in its board meeting last month permitted mutual funds to invest in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).

By PTI  
Thursday, February 16, 2017

To make real estate and infrastructure investment trusts more attractive for investors, regulator Sebi has notified norms allowing mutual funds to invest their money in such entities.

The move comes after Sebi in its board meeting last month permitted mutual funds to invest in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).

A mutual fund is permitted to invest only up to 5 per cent of its net asset value in units of a single issuer of alternative securities. The maximum allowed investment in alternative instruments by a single fund will be capped at 10 per cent.

The cap will not be applicable in the case of index fund or sector- or industry-specific scheme.

"A mutual fund may invest in the units of REITs and InvITs... No mutual fund under all its schemes shall own more than 10 per cent of units issued by a single issuer of REIT and InvIT," Sebi said in a notification dated February 15.

The move is part of Sebi's effort to get more number of investors into REITs and InvITs.

Both REITs and InvITs are expected to help garner billions of dollars into the country's real estate and infrastructure segments.

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