The Securities and Exchange Board of India (SEBI) has proposed to increase the investment limits for mutual funds (MFs) in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The proposal suggests raising the single issuer limit to 10% and the overall exposure to 20% for equity and hybrid schemes. Currently, MFs can invest up to 10% of a scheme’s net asset value (NAV) in REITs and InvITs, with a 5% cap in a single issuer.
Key details of the proposal:
🔸 Increased Limits: SEBI proposes to increase the overall exposure limit from 10% to 20% for equity and hybrid schemes. The single issuer limit is proposed to be revised to 10%.
🔸 Debt Schemes: Debt schemes will retain the existing 10% limit due to the relatively higher risk associated with REITs and InvITs.
🔸 Rationale: The move aims to boost capital flows into REITs and InvITs, broaden their market base and liquidity, and provide more investment avenues for mutual funds, offering better diversification for investors.
🔸 Global Practices: Globally, REITs and InvITs are often treated as equity instruments and included in indices. SEBI is also seeking public and industry feedback on whether to reclassify REITs and InvITs as equity for index inclusion in India.
🔸 Current Investments: As of December 31, 2024, mutual fund exposure to REITs and InvITs stood at ₹20,087 crore.
🔸 Potential Benefits: The proposed changes could enhance mutual fund participation in India’s growing infrastructure and real estate sectors, potentially creating better long-term wealth opportunities for investors through diversification and stable cash flows.
SEBI has invited public comments on this proposal until May 11, 2025.
SEBI Forms Internal Panel to Review NSE’s IPO Proposal
SEBI is currently reviewing the proposal for the National Stock Exchange’s (NSE) Initial Public Offering (IPO). The regulatory body has formed an internal committee to address the various issues surrounding the IPO, which has been delayed for several years. SEBI Chairman Tuhin Kanta Pandey emphasized that the regulator would prioritize public interest over commercial gains during this review. Key concerns under consideration include NSE’s internal processes, governance, and the ownership structure of its Clearing Corporation. NSE had initially filed for an IPO in 2016, but it faced numerous hurdles, including investigations and court cases. While NSE has sought a ‘no-objection’ certificate from SEBI, the regulator is thoroughly examining all aspects to ensure a balanced approach that protects investor interests.
SEBI asked Banks to Report Progress on Cybersecurity Implementation
The Securities and Exchange Board of India (SEBI) has directed banks to provide detailed updates on their implementation of the Cybersecurity and Cyber Resilience Framework (CSCRF). This initiative aims to assess the progress banks have made in adopting CSCRF controls and to identify any challenges they face in achieving full compliance. While SEBI had previously extended the compliance deadlines, it has now emphasized that no further extensions will be granted beyond June 30, 2025. Under the CSCRF, banks are required to submit audit reports and are evaluated through the Cyber Capability Index (CCI), which measures their cybersecurity preparedness. Additionally, banks acting as Bankers to an Issue (BTI) or as Self-Certified Syndicate Banks (SCSBs) must certify their adherence to both SEBI’s and the Reserve Bank of India’s cybersecurity guidelines. For listed banks, these compliance certificates must also be communicated to the stock exchanges. SEBI’s firm stance underscores its commitment to enhancing the cybersecurity infrastructure within the banking sector, ensuring that institutions are well-equipped to handle evolving cyber threats.
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