SEBI has initiated the process to introduce real estate investment trustsand will shortly come up with the first set of proposals on the same.
MUMBAI: Capital market regulator SEBI has initiated the process to introduce real estate investment trusts (REITs) and will shortly come up with the first set of proposals on the same, Chairman M Damodaran said on Wednesday.
"We are also looking at introducing REITs... consultations with persons that have better understanding of these products have commenced and shortly we are going to write the first set of proposals," Damodaran said while delivering a key note address at CII's 2nd Capital Market Summit here on Wednesday.
An REIT offers common shares to the public, representing ownership in an operating business and share most of the profits in the form of dividends. As these shares can be bought or sold in stock exchanges, REITs provide easy liquidity to investors.
SEBI was also in the final stages of preparing norms for the much awaited real estate mutual fund (REMF).
"The accounting solution for valuation of real estate was being worked out by AMFI and ICAI," he assured.
"We will ensure that both the products are made available to the investors and there won't be any partiality in introducing REMF and REIT," he said.
In 2008, the regulator planned to launch a nationwide campaign to educate investors and encourage the market participants to take up the role of self regulating organisations (SROs) more seriously.
"Recognising that the informed investor is going to be the backbone of the market, SEBI is going to devote calendar Year 2008 to a nationwide investor education campaign," Damodaran said, adding that the regulator has already set up its own investor protection fund.
"The regulations for the Fast Track Security Issuance are ready and 30 large companies will be able to avail fast track for raising money from the market," he said.
The regulator, Damodaran said, was also working towards speeding up the development of the corporate bond market.
On the recently announced derivative products, the regulator had already started consultations with stock exchanges to see how quickly these new products can be introduced in the market, he said.
Damodaran also said that foreign investors are showing interest in coming to the Indian market directly after the recent curb on the issue of Participatory Notes (PNs).
"In the last one month, we have evidence of a large number of investors wanting to come to our market... and there was a flood of applications coming in," he said, adding that the intention is to see that Indian market is largely an onshore market and not an offshore market.
"There is no evidence of people walking away... In fact there is evidence of people running in because they want to buy into a story that is a growth story," he added.
On the Dedicated Infrastructure Fund announced during the annual budget for 2007-08, the regulator said that consultations were about to complete.
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