Securities and Exchange Board of India (SEBI) notified regulations in REITs to create a system of regulation for Small and Medium REITs (SM REITs).
Banking & Finance
Securities and Exchange Board of India (SEBI) notified regulations in REITs to create a system of regulation for Small and Medium REITs (SM REITs). Small and medium REITs (Real Estate Investment Trust) shall have the ability to create separate schemes for owning real estate through SPV (Special Purpose Vehicle). These changes are important for formalising the sector, introducing investor faith and addressing the complexity of SPV security issues. These regulations will enable several of these prop-tech platforms to migrate to the SM REIT structure, if they meet the market regulators' 'fit and proper' criteria. SEBI guidelines for SM REITs have reduced the minimum ticket size to Rs10 lakh. The minimum number of investors in an SM REIT has to be at least 200 in any scheme, all of whom should be unrelated to the investment managers, and no single investor can own more than 25% of any scheme. These new proposed regulations mandate that investment managers must have a personal net worth of a minimum Rs20 crore out of which Rs10 crore has to be a positive liquid net worth.
The SM REIT must also buy and own assets that are priced above Rs 25 crore and less than Rs 500 crore.
The final safeguard for investors mandated in small and medium REITs is that 95% of the investor funds must be invested in completed rent-yielding assets.
Securities and Exchange Board of India (SEBI)
Establishment-1992; HQ- Mumbai
Chairperson- Madhabi Puri Buch
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