Regulation 49E - Permissible investments - Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

1 [ Permissible investments 49E. (1) Every real state mutual fund scheme shall invest at least thirty five per cent. of the net assets of the scheme directly in real estate assets. (2) Subject to sub-regulation (1), every real estate mutual fund scheme shall invest- (a) at least seventy five per cent. of the net assets of the scheme in- (i) real estate assets; (ii) mortgage backed securities (but not directly in mortgages); (iii) equity shares or debentures of companies engaged in dealing in real estate assets or in undertaking real estate development projects, whether listed on a recognized stock exchange in India or not; (b) the balance in other securities; (3) Unless otherwise disclosed in the offer document, no mutual fund shall, under all its real estate mutual fund schemes, invest more than thirty per cent. of its net assets in a single city. (4) No mutual fund shall, under all its real estate mutual fund schemes, invest more than fifteen per cent. of its net assets in the real estate assets of any single real estate project. Explanation: For the purposes of this regulation, single real estate project means a project by a builder in a single location within a city. (5) No mutual fund shall, under all its real estate mutual fund schemes, invest more than twenty five per cent. of the total issued capital of any unlisted company. (6) No mutual fund shall invest more than fifteen per cent of the net assets of any of its real estate mutual fund schemes in the equity shares or debentures of any unlisted company. (7) No real estate mutual fund scheme shall invest in (a) any unlisted security of the sponsor or its associate or group company; (b) any listed security issued by way of preferential allotment by the sponsor or its associate or group company; (c) any listed security of the sponsor or its associate or group company, in excess of twenty five per cent of the net assets of the scheme. (8) No mutual fund shall transfer real estate assets amongst its schemes. (9) No mutual fund shall invest in any real estate asset which was owned by the sponsor or the asset management company or any of its associates during the period of last five years or in which the sponsor or the asset management company or any of its associates hold tenancy or lease rights. ] ************** NOTES:- 1 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2008, w.e.f. 16-4-2008.