Prajna Capital - An Investment Guide

The Securities and Exchange Board of India ( SEBI ) has given its final go-ahead to Mutual Funds to launch 'Real Estate Mutual Funds' (henceforth referred to as REMF ). 1) According to the newly issued guidelines, existing Mutual Funds are eligible to launch REMF, if they have adequate number of experienced key personnel/directors. 2) Add to it, sponsors willing to set up new Mutual Funds, for launching only REMF should have been carrying on business in real estate for a period not less than five years. 3) Besides, they have to abide by other eligibility criteria applicable for sponsoring a mutual fund. 4) All REMF shall be closed-ended and their units shall be listed on a recognized stock exchange, thereby providing investors, much needed liquidity. The regulator took a daring step by asking fund houses to declare NAVs of such schemes daily. 5) As far as the composition is concerned, at least 35% of the net assets of the scheme shall be invested directly in real estate assets....