Bengaluru: Starting January 1, 2026, any investment made by Mutual Funds (MFs) and Specialised Investment Funds (SIFs) in Real Estate Investment Trusts (REITs) will be considered as an investment in equity-related instruments , Securities and Exchange Board of India (SEBI) said in a statement.
With a view to facilitating enhanced participation by MFs and SIFs in REITs, SEBI had made amendments to the SEBI (Mutual Funds) Regulations, 1996, to reclassify REITs as equity-related instruments.
Any inclusion of REITs in the equity indices shall be carried out only after a period of 6 months, i.e., July 1, 2026. InvITs (Infrastructure Investment Trusts) shall continue to be classified as hybrid instruments for investments by Mutual Funds and SIFs.
Existing investment in REITs held by debt schemes of Mutual Funds and investment strategies of SIFs as on December 31, 2025, shall be “grandfathered”. Grandfathering is the process of exempting current policies, programs, or perks from new rules or adjustments to the investment/budget.
However, Asset Management Companies (AMC) are encouraged to make efforts to divest REITs from their respective portfolios of debt schemes, considering market conditions, liquidity, and investor interest. SEBI brought in these changes to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
