By Jayshree P Upadhyay

NEW DELHI (Reuters) – The Securities and Exchange Board of India (SEBI) has proposed regulating all on-line platform that provide fractional possession of actual property property, in a bid to offer safety to small traders.

Fractional possession sometimes refers to small funding holdings of actual property property. A lot of internet primarily based platforms have mushroomed previously three years which permit traders to spend money on malls, warehouses, buildings and so forth.

The minimal funding on these platforms sometimes vary from 100,000 rupees to 250,000 rupees.

“The lack of standard, uniform selling practices and lack of independent valuation, or of diligence of information or materials provided to potential investors could result in investors falling prey to mis-selling,” mentioned SEBI, the nation’s market regulator, within the dialogue paper late on Friday.

A dialogue paper is generally step one forward of formulating new guidelines by SEBI.

The regulator proposed that such platforms have to be registered underneath Regulatory Framework for Micro, Small and Medium REITs, the place it ought to have separate trustees, sponsors and funding managers.

The sponsor and funding supervisor ought to have a internet price of 20 million rupees and 10 million rupees, respectively, the regulator mentioned.

The underlying actual property property provided on these platforms are much like the actual property or property outlined underneath the REIT Regulations, mentioned SEBI within the dialogue paper.

Globally such fractional possession has been in existence since 2015 in markets such because the United States and United Arab Emirates.

(Reporting by Jayshree P Upadhyay; Editing by Shri Navaratnam)