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Regulator Aims to Safeguard Small Investors in Web-Based Real Estate Ownership Platforms

INDIA: The Securities and Exchange Board of India (Sebi), the capital markets regulator, has taken a step towards protecting small investors by introducing a consultation paper to regulate web-based fractional ownership platforms (FOPs) that offer fractional ownership of real estate assets.

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A paper was released on Friday which outlines a proposed framework that aims to enhance the real estate market, ensure investor protection, and promote orderly growth in this sector and the market.

Under Sebi’s Real Estate Investment Trusts rules, the plan is to categorize fractional ownership of real estate assets as Micro, Small and Medium REITs.

This move intends to enable individuals to invest in a portion of the real estate by splitting the acquisition cost among multiple investors.

These investors would purchase securities issued by a special purpose vehicle (SPV) established by an FOP.

The SPVs, in turn, acquire real estate assets. While some FOPs are managed by real estate agents or brokers during the property selection process, they subsequently function as property managers

 

Laila Waqar

Laila Waqar is the Content Lead at Graana.com. With a bachelor's degree from LUMS, her expertise lies in curating research-based content in line with market marketing requirements. She is a detailed-oriented professional who focuses on delivering quality content that is enlightening and engaging.

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