The investment in REITs made by Mutual funds and SIFs

Solution

With  effect  from January  01,  2026,  any investment  made  by Mutual  Funds and   specialised investment funds (SIFs) in   REITs shall be considered   as investment   in equity   related instruments. Earlier REITs were considered as Hybrid instruments. InvITs  shall continue  to  be  classified  as  hybrid  instruments for the purpose of investments by Mutual Funds and SIFs. Any inclusion of REITs in the equity indices shall be carried out only after a period of six months i.e, July1, 2026. Existing  investment in  REITs  held by  debt  schemes of  Mutual  Funds and investment strategies    of SIFs as    on December    31,    2025, shall be grandfathered. However, AMCs are encouraged to make efforts to divest REITs from respective portfolios of debt schemes considering the market conditions, liquidity and interest of investors. Note - Grandfathering is a clause that exempts current policies, laws, or benefits from new restrictions or modifications.