3. Money shall be invested only in
transferable securities in the money
market
Money collected under money market
Accordance with regulation 49E
RBI
4. • More than 20 per cent of
the net asset of the scheme
• not exceed a period of six
months
Mutual fund shall not
borrow except to meet
temporary liquidity
needs
44-INVESTMENT ,BORROWING ,RESTRICTIONS ETC
Investment under regulation 43 shall be subject to the
investment restriction specified in the seventh schedule
5. Shall not
advance
any loan
lend and
borrow
securities in
accordance
gold
exchange
traded fund
scheme
invested funds
accordance with
its investment
objective
6. 45-CARRY FORWARD TRANSACTIONS, DERIVATIVES TRANSACTIONS AND
SHORT SELLING TRANSACTIONS
Shall not in any manner be used in carry forward transactions
Enter into derivative transaction on a
recognised stock exchange
Enter into short selling transactions on a recognized stock
Exchange
Framework specified by the Board
8. Compute and carry out valuation
of its investment portfolio
Publish with valuation norms
specified in eighth schedule
47-METHOD OF VALUATION OF INVESTMENT
NAV = NET ASSET OF THE SCHEME
NO OF UNITS OUTSTANDING
9. 48-COMPUTATION OF NET ASSET VALUE
• NAV = NET ASSET OF THE SCHEME
NO OF UNITS OUTSTANDING
published at least in two daily newspapers at intervals of
not exceeding one week
Provided NAV is of closed ended scheme
Other than equity linked
saving scheme
Calculated on daily basis
At least two newspapers
-circulation in India
10. 49-Pricing of units
Price at which the units subscribed or sold shall be made available to the investors
Open-ended scheme, shall at least once a week publish the sale and repurchase
price of units
Ensure repurchase price is not lower than 93 % of NAV & sale price is not
higher than 107 % of NAV
Shall not be lower then 95%
of the NAV
DIFFERENCE SHALL NOT EXCEED 7%
ON SALE PRICE
12. i) located within India in a city
ii) on which construction is complete and which is usable
(iii) which is evidenced by valid title documents
(iv) which is legally transferable
(v) which is not subject matter of any litigation
49 A Definitions
(a) “real estate asset” means an identifiable immovable property-
13. But does not include
I. a project under construction
II. vacant land
III. deserted property
IV. land specified for agricultural
use
V. a property which is reserved or
attached by any Government
15. 49B. Applicability
• (1) Provisions apply to real estate mutual fund schemes.
(2) All other provisions of the regulation and guidelines used
there under shall apply
• To real estate mutual fund schemes
• And trustees
•And asset management companies in relation to such
schemes
17. carrying on business in real estate for over 5 years
Certificate of registration granted to applicant proposing to launch only real estate
mutual fund schemes if he
A real estate mutual fund scheme of a mutual fund registered
shall not invest in the securities unless it has key personnel having
adequate professional experience in financial services.
An existing mutual fund may launch a real estate mutual fund scheme if
•It has an adequate number of key personnel
•And directors having adequate experience in real estate
18. 2) The units issued shall not confer any right to unit holders to use the real
estate assets held by the scheme
3) The title deeds shall be kept in safe custody with custodian
4) scheme shall not undertake lending or housing finance activities.
(1) shall be close-ended And units be listed on a recognized stock exchange
49D. Other conditions for real estate mutual fund schemes
(5) All financial transactions of a real estate mutual fund scheme shall be
routed through banking channels
19. 49E. Permissible investments
Of the net assets of the scheme directly in real estate
assets.
of the net assets of the scheme
(I) real estate assets
(ii) mortgage backed securities
(iii) equity shares or debentures of companies engaged in dealing in real
estate assets
in other securities
At least 35%
Atleast 75%
balance
20. No mutual fund shall, under all its real estate mutual fund schemes invest
net assets in a single city .Unless disclosed in the offer document,.
net assets of any of its schemes in the equity shares or debentures of any unlisted
company.
Total issued capital of any unlisted company.
net assets in the real estate assets of any single real estate
project(“single real estate project” means a project by a builder in a
single location within a city)
Transfer real estate assets amongst its schemes.
Invest in any real estate asset which was owned by the sponsor or the
asset management company
more than
30% of
more than
25% of
more than
15% of
more than
15% of
Period of 5
years
21. 49F. Valuation of real estates assets and declaration of net asset value
valued at cost price on the date of acquisition and
At fair price on every 19 day from the day of its purchase
AMC , directors, trustees and real estate valuer
•Ensure valuation done in good faith &
Accounts of the scheme prepared in accordance with accounting principles
Calculation and declared At the close of each business day on the basis of
• The most current valuation of the real estate assets held by the scheme
22. 49G. Duties of asset management company of real estate mutual fund scheme
Appoint suitable number of
qualified key personnel
•Ensure cost of maintenance and
insurance within reasonable limits
Appoint advisors to advise it
on acquisitions
Due care in appointing real
estate valuers
Real estate assets held are insured
against impair, damage or
destruction
Due diligence in maintenance
of the assets of a real estate
mutual fund scheme
Ensure no valuer continues with
valuation of particular asset for
more than 2 years
No valuer values the same asset
for a period of at least 3 years
thereafter
Record in writing, the details
of its decision making process
in buying or selling real estate
assets
ensure that investment of
funds of the real
estate mutual fund scheme is
not made contrary to provisions
23. 49H- Usage of real estate assets of a real estate mutual fund scheme
1
The asset management
company may let out or lease
out the real estate assets
ease or letting does not
extend beyond the period of maturity
of the scheme
diligently collect the rents or other
income in a timely manner
Where real estate assets are let
out or leased out
2
at market price or
otherwise on commercial terms:
not more than 25% of the total rental income of the scheme shall be
derived from assets so let out.
Let out to the sponsor or AMC
3
24. 49 I. Duties of trustees
Monitor due diligence of
AMC in managing the
investments
Review the market price of
units &recommend
proportionate buy back of
units from unit holders
Lay down the broad
procedure to be followed
by the AMC while
transacting in real estate
assets
obtain approval from the
recognized stock
exchange(s) where units
are proposed to be listed
Ensure that all financial
transactions of scheme made
only through banking
channels
Ensure that only
Permissible investments
are made by AMC
25. Effectively monitor
performance and
functioning
Necessary expertise,
internal control systems
and risk management
The trustees shall lay
down the broad
procedure while
transacting
include a confirmation
on compliance with sub
regulation (9) in their
half yearly reports
Shall obtain In principle
approval from the
recognized stock
exchange
26. (1) The offer documents of real estate mutual fund schemes shall
contain disclosures which are adequate for investors to make
informed investment decisions
The portfolio disclosures and financial disclosure specified by
board
Advertisments shall confirm guidelines specified by board
(49J) Disclosures in offer document and other
disclosures
27. 49K.TRANSACTIONS BY EMPLOYEES ETC.
Disclosure of transactions to the compliance officer with in one month
Compliance officer shall make report and suggest recommendation if any
The persons covered in sub-regulation (1) may obtain the views of the trustees
before
entering into the transaction in real estate assets,
28. 48 Amendments
in regulation 48, sub-regulation (2) and the proviso shall be substituted
with
the following, namely -
"(2) The Net Asset Value of the scheme shall be calculated on daily basis
and
published in at least two daily newspapers having circulation all over
India.".
30. 44 Amendments
• in regulation 44, sub-regulation (3) shall be
substituted with the following, namely:-
• “(3) Save as otherwise expressly provided
under these regulations, the mutual fund shall
not advance any loans for any purpose
31. 47 amendments
• for regulation 47, the following shall be substituted,
namely:– “Valuation of investments
• 47. Every mutual fund shall ensure that the asset
management company computes and carries out
valuation of investments made by its scheme(s) in
accordance with the investment valuation norms
specified in Eighth Schedule, and publishes the
same.”;
32. Eighth schedule
• in the Eighth Schedule,
• (a) in the reference title, the word and number, “regulation 47”
shall be substituted with the word and numbers “regulations
25(19), 47”;
• (b) the words and symbol “Mutual fund shall value its investments
according to the following valuation norms:” appearing under the
heading “Investment Valuation Norms”, shall be omitted;
• (c) after the heading “Investment Valuation Norms”, the following
sub-headings and clauses shall be inserted, namely:−
