SEBI gives nod to mutual funds investment in REITs, InvITs

The Securities and Exchange Board of India (SEBI) board, which has been looking at ways to attract more investors, has allowed mutual funds to invest in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) that have been classified as hybrid instruments.

Under the same guidelines, the mutual fund can invest up to five percent of its net asset value in units of a single issuer of REITs and InvITs, while the cap will not be applicable in the case of index fund or sector or industry-specific scheme.

Keeping the overall limit at 10 percent, the Net Asset Value (NAV) in units of REITs and InvITs is aimed at reducing the overall transaction cost and protecting the interest of public shareholders.

The market regulator's board also gave its nod to market intermediaries and companies to make regulatory payments digitally.

"Keeping this objective in mind and taking into consideration the projected income and expenditure of SEBI for the next three financial years, the board decided to reduce the fees payable by brokers by 25 percent from Rs. 20 per crore of turnover to Rs. 15 per crore," said the SEBI in a release.

It has also decided to provide incentives to defaulters coming on their own to settle cases before the start of enforcement action, even as excessive delays in filing of settlement applications will attract higher charges.

As part of measures to protect the interest of public shareholders, the merger norms will also be tweaked under which very large unlisted companies will be restrained from getting listed by merging with a very small company.

However, the SEBI has also allowed celebrity endorsement of products in the

fast-growing mutual funds market and will amend financial criteria for municipalities to issue bonds.