Mutual Funds were allowed to invest in hybrid securities such as units of REITs and InvITs

In terms of SEBI (Mutual Funds) (Amendment) Regulations, 2017 dated February 15, 2017 and SEBI Circular dated February 28, 2017, mutual funds were allowed to invest in hybrid securities such as units of REITs and InvITs subject to investment restrictions. Any existing scheme intending to invest in units of REITs/InvITs would have to abide by the provisions of Regulation 18 (15A) of SEBI (Mutual Funds) Regulations, 1996. For investment in units of REITs/InvITs by an existing MF scheme, unit holders of the scheme were given a time period of at least 15 days for the purpose of exercising the exit option. In accordance with SEBI (Mutual Funds) (Amendment) Regulations, 2017 dated February 15, 2017 and SEBI Circular dated February 28, 2017, the Mutual Fund under all its schemes shall not own more than 10% of units issued by a single issuer of REIT and InvIT. At a single Mutual Fund Scheme level, it shall not own: i. more than 10% of its NAV in the units of REIT and InvIT; and ii. more than 5% of its NAV in the units of REIT and InvIT issued by a single issuer. Depending on the development of the market, the internal investment norms are required to be submitted to the Board of AMC for approval before making any investment in units of REITs/InvIT. For further details, please see the SEBI circular SEBI/HO/IMD/DF2/CIR/P/2017/17 dated February 28, 2017.