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Now mutual funds can invest in the units of REITs and InvITs

February 17, 2017
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SEBI (MUTUAL FUNDS) (AMENDMENT) REGULATIONS, 2017 – AMENDMENT IN REGULATION 2 AND SEVENTH SCHEDULE

NOTIFICATION NO.SEBI/LAD/NRO/GN/2016-17/031, DATED 10-2-2017

In exercise of the powers conferred by section 30 read with clause (c) of sub-section (2) of section 11 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, namely:—

1. These Regulations may be called the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2017.

2. They shall come into force on the date of their publication in the Official Gazette.

3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996,

I.  in regulation 2, —
i.  the following new clause shall be inserted after clause (mn), namely,—
"(mo)  "InvIT" or "Infrastructure Investment Trust" shall have the meaning assigned in clause (za) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014;"
ii.  the following new clause shall be inserted after clause (sa), namely,—
"(sb)  "REIT" or "Real Estate Investment Trust" shall have the meaning assigned in clause (zm) of sub-regulation 1 of regulation 2 of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014;"
iii.  the existing clause (sb) shall be re-numbered as clause (sc).
II.  in the Seventh Schedule, the following new clause shall be inserted after clause 12, namely,—
"13.  A mutual fund may invest in the units of REITs and InvITs subject to the following:
(a)  No mutual fund under all its schemes shall own more than 10% of units issued by a single issuer of REIT and InvIT; and
(b)  A mutual fund scheme shall not invest —
i.  more than 10% of its NAV in the units of REIT and InvIT; and
ii.  more than 5% of its NAV in the units of REIT and InvIT issued by a single issuer.
  Provided that the limits mentioned in sub-clauses (i) and (ii) above shall not be applicable for investments in case of index fund or sector or industry specific scheme pertaining to REIT and InvIT."

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