SALIENT FEATURES OF REMFS :

Some of the salient features of REMFs are as under:

1. An Existing Mutual Funds are eligible to launch real estate mutual funds if they have adequate number of experienced key personnel/directors having adequate experience in real estate.

2. Sponsors seeking to set up new Mutual Funds, for launching only real estate mutual fund schemes, shall be carrying on business in real estate for a period not less than five years. They shall also fulfill all other eligibility criteria applicable for sponsoring a MF.

3. Every real estate mutual fund scheme shall be close-ended and its units shall be listed on a recognized stock exchange.

4. Net asset value (NAV) of the scheme shall be declared daily.

5. At least 35% of the net assets of the scheme shall be invested directly in real estate assets. Balance may be invested in mortgage backed securities, securities of companies engaged in dealing in real estate assets or in undertaking real estate development projects and other securities. Taken together, investments in real estate assets, real estate related securities (including mortgage backed securities) shall not be less than 75% of the net assets of the scheme.

6. Unless, otherwise disclosed in the offer document, no mutual fund shall, under all its real estate mutual fund schemes, invest more than thirty percent of its net assets in a single city.

7. Unless otherwise stated, the investment restrictions specified in the Seventh Scheme shall apply.

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.

10. A real estate mutual fund scheme shall not undertake lending or housing finance activities.