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ARTICLE · 05 JULY 2023

Regulating Fractional Ownership Platforms – A Step In The REIT Direction?

On May 12, 2023, the Securities and Exchange Board of India (SEBI) issued a consultation paper proposing a regulatory framework to govern fractional ownership platforms (FOPs).

IndiaFinance and Banking

On May 12, 2023, the Securities and Exchange Board of India (SEBI) issued a consultation paper proposing a regulatory framework to govern fractional ownership platforms (FOPs). These FOPs offer investors an avenue to hold fractional ownership in commercial real estate and earn yield through the rent received and/or appreciation in the value of such property. By governing these platforms, SEBI would be taking a step in regulating fintech offerings after introducing regulatory frameworks for execution-only platforms and online bond platforms last year. Given the global economic scenario, investors have been seeking alternatives to the equity markets. By regulating products such as retail debt offerings and now fractional ownership of commercial real estate, SEBI will be providing viable investment avenues to retail investors.

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The contents of this article should not be construed as legal opinion. Recipients should take independent legal advice before acting on any views expressed herein. The comments in the article are as of the laws prevalent on the date the article was originally published. The views stated in the article are not binding on any authority or court, and so, no assurance is given that a position contrary to that expressed herein will not be asserted by any regulatory authority/courts. For any further queries or follow up, please contact Finsec Law Advisors.

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