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Mutual Funds Schemes May Offer REITs, InvITs Investors15 Days Time For Exit

The Securities and Exchange Board of India (SEBI) recently notified regarding the norms for the mutual funds investments pertaining to Infrastructural Investment Trust (InvITs) and Real Estate Investment Trust (REITs). This move was initiated in anticipation of generation of more funds for the infrastructural projects and realty segment within country.

In series to this, another guideline has been issued by the SEBI stating that an exit option can be exercised within 15 days to all the unit holders who are investing in the Mutual Funds schemes investments in REITs and InvITs. The SEBI recently issued this circular to notify this important announcement and this is into force with an immediate effect. All the existing schemes which are intending to invest in InvITs and REITs shall get abided by these latest SEBI’s mutual funds norms.

An investment up to 5% of net asset value of a single issuer for alternative securities is only permitted under mutual fund. But alternative instruments by a single source of fund can enjoy a cap of 10%. However, industry/sector specific schemes and index fund are not required to comply with this investment cap.

This move is expected to bring in billions of US dollar by attracting investors to invest more and more into REITs and InvITs.

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