SEBI Classifies REITs as Equity; Cracks Down on Fake Investment Advisors on Social Media

New Delhi: In a landmark decision, India’s capital market regulator SEBI has reclassified Real Estate Investment Trusts (REITs) under the equity category, effective 1 January 2026. This move aims to encourage mutual funds (MFs) and Specialized Investment Funds (SIFs) to invest more freely in the real estate sector.

According to SEBI’s circular, any investments made by MFs and SIFs in REITs after 1 January 2026 will be treated as equity investments. Meanwhile, Infrastructure Investment Trusts (InvITs) will continue to remain in the hybrid category, combining equity and debt.

Impact on Existing Investments

Investments in REITs under debt schemes until 31 December 2025 will remain unaffected by the new rules. However, fund houses are advised to gradually exit these old debt-based REIT investments, keeping investor interests and market conditions in mind. The Association of Mutual Funds in India (AMFI) will update its lists to include REITs under equity, while Asset Management Companies (AMCs) will revise their scheme documents accordingly. SEBI clarified that this change will not be considered a fundamental alteration to the schemes.

REITs will be included in market indices only after 1 July 2026. The regulator’s goal is to simplify and encourage investment in the real estate sector through MFs and SIFs.

Crackdown on Social Media Investment Advisers

SEBI is also tightening regulations for social media investment advisers. Under the new proposal, all registered individuals, companies, and agents must display their registered name and SEBI registration number clearly on their social media homepages.

Promoting financial products without SEBI approval, including past performance, will be prohibited. Any social media post that directly or indirectly promotes a product or service will be treated as an advertisement, subject to advertisement regulations. This move aims to protect investors from misleading advice and ensure transparency in digital investment communications.