Sebi's New Proposal for Mutual Funds

Markets regulator Sebi has issued a consultation paper that could significantly change how mutual funds invest in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The proposal includes increasing the investment limits and considering a reclassification of these instruments.

Investment Limits and Reclassification

Under the new proposal, equity funds may invest up to 20% of a scheme's assets in REITs and InvITs, while debt funds are suggested to maintain a 10% limit. Additionally, Sebi is seeking opinions on whether REITs and InvITs should be categorized as 'equity-related instruments' instead of their current 'hybrid' status.

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