SEBI's Consultation Paper on fractional ownership of real estate

Securities Exchange Board of India (SEBI) has released a consultation paper titled “Regulatory Framework for Micro, Small and Medium REITs” ('Consultation paper’) towards regulating fractional ownership of real estate in India. The paper notes the recent increase in the number of Fractional Ownership Platforms (FOPs) and the heterogeneity of their structures and offerings. SEBI has proposed to regulate these FOPs under the REIT Regulations by creating a separate category of Micro, small and medium REITs under the REIT Regulations, 2014 to ensure investor protection.

The Consultation paper is a welcome and important step by SEBI towards formalising and regulating fractional ownership of real estate, but the suggested regulatory approach may be seen as a missed opportunity to introduce a broader framework pertaining to asset tokenisation.

Crypto Legal and India Blockchain Forum (IBF) are pleased to share our response to the consultation paper with a hope that considering these suggestions can improve the proposed regulatory framework.


Response to SEBI's Consultation Paper on MSM REIT