Through its recent consultation paper titled
"Regulatory Framework for Micro, Small and Medium REITs
(MSM REITs)" dated 12 May, 2023
("Consultation Paper"), the Securities
and Exchange Board of India ("SEBI")
proposes the regulation of all platforms that offer fractional
ownership of real estate assets.
Vide the consultation paper, SEBI seeks
comments/views/suggestions from the public on the proposal for
regulating fractional ownership platforms
("FOPs"). The markets regulator proposes
to bring in the fractional ownership of real estate assets as
'MSM REITs' under the existing framework of SEBI (Real
Estate Investment Trusts) Regulations, 2014 ("REIT
Regulations").
The Consultation Paper has been prepared by SEBI in light of the
sudden rise of FOPs over the past 2-3 years. In brief, FOPs provide
retail investors the opportunity to invest in commercial real
estate (which was earlier primarily restricted to institutional
investors) such as buildings and office
