Market watchdog clears decks for REIT launch

The Securities and Exchange Board of India on Sunday set the stage for launch of Real Estate and Infrastructure Investment Trusts, commonly referred to as REITs and InvIT.

In the final regulations, the market regulator has made some major changes to what it had proposed earlier.

These include allowing foreign institutional investor participation and reducing the minimum asset size for a REIT.

Those in the sector said these two new instruments had the potential of attracting nearly Rs 1 lakh crore (Rs 1 trillion) to the cash-starved real estate and infrastructure sector.

The proposals were cleared at a meeting of the Sebi board, which was addressed by Finance Minister Arun Jaitley.

In Budget 2014-15, the finance minister had announced giving a pass-through status to these trusts.

In his first interaction with Sebis board after assuming charge as finance minister, Jaitley asked the regulator to be vigilant about possible violations in the marketplace and to come up wit measures to attract retail investors and address their grievances.

Sebi Chairman U K Sinha said after the meeting that these trusts would help in the progress of the real estate and infrastructure sectors.

While the draft guidelines did not give a clarity on foreign investments in these trusts, the final norms have permitted foreign entities to invest in REITs.

These investments, however, will be subject to certain guidelines, which will be issued by the Reserve Bank of India.

Read more from the original source:
Market watchdog clears decks for REIT launch