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The regulatory authority of the Indian market, the Securities and Exchange Board of India (SEBI) has announced on Friday that it is going to issue some guidelines on the Real Estate Mutual Funds (REMFs) within the next 15 days. The officials of SEBI have stated that these new guidelines would also enable the retail investors to access the realty market that has witnessed a huge boost up in the last few years.
While announcing the intentions of SEBI, its Whole Time Member, Mr. T C Nair said, "Sebi is ready with guidelines on real estate MFs that could be issued any day. The outer time limit to issue guidelines is 15 days". He said that the authority has already resolved all the legal issues, including accounting and valuation and the norms are likely to be issued at anytime. He added that the SEBI board has also given its nod to the decision. The industry sources have informed that an REMF has the investment objective to invest directly or indirectly in the real estate and such mutual funds are being governed by the provisions of SEBI (Mutual Funds) Regulations, 1996.
The President of Assocham, Mr. Venugopal N Dhoot was also talking about the possibility of the norms coming soon and said that only the venture capital funds are being allowed to offer real estate funds to high net worth individuals and institutional and global investors, at the moment. The regulations of SEBI depict that the individual investors in an REMF is bound to invest at least $11,500, however, the current players have already set the minimum contribution at far higher levels. Mr. Nair added that the Institute of Chartered Accountants of India (ICAI) did raise some objections to these funds and objections have also been resolved. The Association of Mutual Funds in India (AMFI) has also welcomed the decision, as its Chairman, Mr. A P Kurian said, "There is a huge potential for the market of real estate mutual funds, and once the guidelines are issued, fund houses could come out with close-ended interval funds".
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| Posted : 4/7/2008 |
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