SEBI to discuss a/c norms for realty MFs with ICAI

KOLKATA: The Securities & Exchange Board of India (SEBI) said that it will soon finalise accounting policies to be adopted for the proposed real estate mutual funds.

SEBI will take up the matter with the Institute of Chartered Accountants of India (ICAI) next week, said SEBI whole-time director TC Nair.

The regulator is contemplating allowing mutual fund houses to offer real estate funds to investors, but before that, it is trying to resolve the issues involving accounting policies, tax treatment and stamp duty structures.

According to Association of Mutual Funds in India (Amfi) chairman AP Kurian, accounting issues are primarily stopping the regulator from allowing fund houses to offer real estate MFs. “We are hopeful that this would be sorted out this year itself,” Mr Kurian said.

“Investments in real estate is normally considered risky. Mutual fund is an ideal instrument for propelling investments in real estate,” JM Financial Asset Management managing director NP Ghanekar noted.

Amfi has recommended that real estate MFs should be close-ended funds for a minimum period of three years. The net asset value for this scheme should be calculated on a quarterly basis.