Sebi plans to introduce real estate trusts

Sebi plans to introduce real estate trusts


Mumbai: Capital market regulator Sebi has initiated the process to introduce real estate investment trusts (REITs) and will shortly come up with the first set of proposals on the same, chairman M Damodaran said on 21 November.

“We are also looking at introducing REITs... consultations with persons that have better understanding of these products have commenced and shortly we are going to write the first set of proposals," Damodaran said while delivering a key note address at CII’s 2nd Capital Market Summit here.

An REIT offers common shares to the public, representing ownership in an operating business and share most of the profits in the form of dividends. As these shares can be bought or sold in stock exchanges, REITs provide easy liquidity to investors.

Sebi was also in the final stages of preparing norms for the much awaited real estate mutual fund (REMF).

“The accounting solution for valuation of real estate were being worked out by Amfi and ICAI," he assured.

“We will ensure that both the products are made available to the investors and there won’t be any partiality in introducing REMF and REIT," he said.

In 2008, the regulator planned to launch a nationwide campaign to educate investors and encourage the market participants to take up the role of self-regulating organizations (SROs) more seriously.