SEBI Relaxes REIT's Investment Ticket Size
Following a board meeting, Securities and Exchange Board of India (SEBI) has reduced the investment ticket size in REITs, relaxed investment norms in alternative investment funds (AIFs) and tightened the directorship norms for listed companies to enhance corporate governance standards. SEBI has relaxed the investment norms in real estate investment trusts (REITs), which has been gaining a huge popularity over the past two years. Amending the extant norms, Sebi has revised the minimum subscription and trading lot for publicly issued REITs and InvITs. Sebi said the minimum application value will be brought down from Rs. 50,000 now to a range of Rs.10,000-15,000 and the revised trading lot shall be of one unit. The markets regulator has amended the country's mutual fund regulations, directing AMCs in the country to put in a minimum amount of money from their own account every time a mutual fund scheme is launched. Sebi said that AMCs will have to make such an investment contribution as a "skin in the game" in proportion to the varying amount of risks associated with the MF scheme, which essentially means higher the risk of losses bigger has to be the minimum contribution made by the AMC itself. At present, as skin in the game in the MF schemes AMCs are required to provide an investment of 1% of the amount raised in the new fund offer or Rs. 50 lakh, whichever is less. SEBI's move will not only make AMCs more cautious while launching MF schemes but also, curb mis-selling and ensure that fund managers allocate the public money more judiciously to curb risks of losses. SEBI's latest move assumes significance in the backdrop of a few instances over the past three years in which many retail MF investors had to suffer losses on their net asset values (NAVs) because of investment in high-risk instruments or high exposure of investment in a single sector.
Tags : News/Views Investment SEBI REIT Mutual Fund Relaxes Ticket Size