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SEBI Moves to Include REITs in Market Indices, Aims to Enhance Liquidity and Investor Participation
SEBI: SEBI is preparing to include REITs in market indices, which will increase liquidity and investment in these investment instruments. SEBI chief Tuhin Kant Pandey said that discussions will be held soon with the industry and other stakeholders.
Market regulator SEBI is all set to include REITs in market indices, thereby substantially enhancing liquidity for these investment instruments. According to the Securities and Exchange Board of India Chairman, Tuhin Kant Pandey, discussions would be held with the industry and other stakeholders on the issue of the inclusion of REITs in market indices. Inclusion in market indices will lead to an improvement in liquidity pertaining to REIT-related investment instruments.
The SEBI chairman further said the regulator is taking necessary steps to make business easy for REITs and InvITs. In this regard, SEBI is mulling a proposal on increasing the ambit of liquid mutual fund schemes where the money collected by REITs and InvITs can be invested, with adequate protection for investor interest.
Speaking at a national conference on REITs and InvITs, Pandey said the regulator is also considering whether private InvITs can be allowed to invest in new projects, subject to adequate safeguards. SEBI is actively engaging with institutional investors to rapidly increase their participation in these instruments.
The SEBI chief said the market for these investment instruments is still nascent. Nevertheless, the regulator is working closely with the Ministry of Finance and several state governments to accelerate public asset monetization as part of efforts to increase participation. Furthermore, SEBI is also working with the Insurance Regulatory and Development Authority (IRDA), the Pension Fund Regulatory Development Authority (PFRDA), and the Employees' Provident Fund Organization (EPFO) to encourage greater participation from institutions under their jurisdiction.
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Pandey said SEBI will continue to provide all necessary frameworks in this regard. However, industry sponsors, managers, advisors, and intermediaries should believe in the growth of this asset class and help generate liquidity.
Regarding India, he said, the global REIT market is more mature. However, in India, retail participation is low due to a lack of awareness.
Surveys show that awareness about these instruments is only around 10%, and participation is less than one%. This must change.
REITs are companies that own and operate real estate. They offer investors the opportunity to purchase high-end real estate assets and earn dividends.
