MFs to give 15 days for exit option to REITs, InvITs investors

Mutual Fund schemes investing in REITs and Infrastructure Investment Trusts (InvITs) will have to give 15-day time to unit-holders to exercise exit option, Sebi said today.

The Securities and Exchange Board of India (Sebi) earlier this month notified norms allowing mutual funds to invest in REITs and InvITs in order to attract more investors.

REITs and InvITs are expected to help garner billions of dollars for the country's real estate and infrastructure segments.


"For investment in units of REITs/InvITs by an existing Mutual Fund scheme, unit-holders of the scheme shall be given a time period of at least 15 days for the purpose of exercising the exit option," Sebi said in a circular.

Any existing scheme intending to invest in units of REITs/InvITs will have to abide by Sebi's Mutual Funds norms.

This circular would come into force with immediate effect.

A mutual fund has been permitted to invest only up to 5 per cent of its net asset value in units of a single issuer of alternative securities.

The maximum allowed investment in alternative instruments by a single fund is capped at 10 per cent. The cap is not applicable in the case of index fund or sector or industry-specific scheme.