Sebi to regulate platforms offering ownership of real estate assets

By Jayshree P Upadhyay

NEW DELHI (Reuters) – The Securities and Exchange Board of India (SEBI) has proposed regulating all online platforms offering partial ownership of real estate assets, in a bid to provide protection to small investors.

Fractional ownership usually refers to small investment holdings of real estate assets. A number of web-based platforms have popped up in the past 3 years that allow investors to invest in shopping malls, warehouses, buildings, etc.

The minimum investment in these platforms usually ranges from Rs 100,000 to Rs 250,000.

“A lack of standardized and consistent selling practices and a lack of independent evaluation, or care, of information or materials provided to potential investors may result in investors falling prey to misselling,” SEBI, the country’s market regulator, said in the discussion paper. late Friday.

The discussion paper is usually the first step before new rules are drafted by SEBI.

The regulator suggested that such platforms should be registered under the regulatory framework for micro, small and medium REITs, where they should have separate trustees, sponsors and investment managers.

The regulator said the net worth of the sponsor and the investment manager should be 20 million rupees and 10 million rupees, respectively.

SEBI said in the discussion paper that the underlying real estate assets offered on these platforms are similar to real estate or property defined under REIT regulations.

Globally, this part-ownership has been around since 2015 in markets such as the United States and the United Arab Emirates.

(Reporting by Jayshree P Upadhyay; Editing by Shri Navaratnam)