Market regulator SEBI said on Friday it will issue guidelines on real estate mutual funds in the next 15 days, enabling retail investors as well to access the realty market which has witnessed a boom in the last few years.
"SEBI is ready with guidelines on real estate MFs that could be issued any day. The outer time limit to issue guidelines is 15 days," Securities and Exchange Board of India's whole time member TC Nair told reporters in New Delhi.
Speaking at a conference on Real Estate Mututal Funds, organised by Assocham, he said all legal issues including accounting and valuation have been resolved and norms could be issued anytime. SEBI board has already given its nod, he said.
A real estate mutual fund (REMF) has investment objective to invest directly or indirectly in real estate property and should be governed by the provisions and guidelines under the SEBI (Mutual Funds), Regulations, 1996.
Assocham President Venugopal N Dhoot noted that currently only venture capital funds are allowed to offer real estate funds to high net worth individuals, institutional and global investors.
According to SEBI regulations, individual investors in a REMF must invest at least $11,500, but the current players have set minimum contribution at far higher levels.
Nair said earlier the Institute of Chartered Accountants of India (ICAI) had raised some objections to these funds and those have since been resolved.
Welcoming the decision, Associaton of Mutual Funds in India (AMFI) Chairman AP Kurian said, "There is huge potential for the market of real estate mututal funds, and once the guidelines are issued, fund houses could come out with close ended interval funds."