Notification on Real Estate Mutual Fund Schemes and Initial Issue Expenses
Summary
This document part introduces the SEBI (Mutual Funds) (Amendment) Regulations, 2008, which formally define and regulate real estate mutual fund schemes. It establishes specific definitions for 'real estate asset' and 'real estate mutual fund scheme' while outlining eligibility criteria for launching such funds. The text further details operational constraints, including investment mandates, custody requirements, and prohibitions on lending activities. This section establishes investment restrictions for real estate mutual funds, including limits on city-wise, project-wise, and unlisted company exposures. It mandates specific valuation methods for real estate assets and outlines the duties of asset management companies regarding personnel, internal controls, and insurance. Additionally, it defines trustee responsibilities, disclosure requirements in offer documents, and protocols for employee transactions. This section establishes Part B of the Seventh Schedule governing direct investment in real estate assets by real estate mutual fund schemes. It defines key terms such as 'fair value' and 'knowledgeable' to standardize valuation practices. The text outlines specific accounting pro
Text
These regulations may be called the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2008.
They shall come into force on the date of their publication in the Official Gazette.
“mutual fund” means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets;
“real estate mutual fund scheme” means a mutual fund scheme that invests directly or indirectly in real estate assets or other permissible assets in accordance with these regulations;
(g) appointment of custodian in order to keep custody of the securities or gold and gold related instrument or other assets of the mutual fund held in terms of these regulations, and provide such other custodial services as may be authorised by the trustees;
Provided further that in case of a real estate mutual fund scheme, the title deed of real estate assets held by it may be kept in the custody of a custodian registered with the Board.
(c) the initial issue expenses of the scheme launched prior to commencement of the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2008 have been amortised fully in accordance with the Tenth Schedule.
(f) real estate assets as defined in clause (a) of regulation 49A.
(5) Moneys collected under a real estate mutual fund scheme shall be invested in accordance with regulation 49E.
“real estate asset” means an identifiable immovable property- (i) which is located within India... (ii) on which construction is complete and which is usable; (iii) which is evidenced by valid title documents; (iv) which is legally transferable; (v) which is free from all encumbrances; (vi) which is not subject matter of any litigation; but does not include- I. a project under construction; or II. vacant land...
“real estate valuer” means a qualified valuer of real estate assets who has been accredited by a credit rating agency registered with the Board.
The provisions of this Chapter shall apply to real estate mutual fund schemes.
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Source: SecMarx — Notification on Real Estate Mutual Fund Schemes and Initial Issue Expenses. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.