New SEBI Rule: MF & SIF in REITs Classified as Equity in 2026

According to the new norms of SEBI, India's capital markets regulator, mutual funds and SIFs (Specialized Investment Funds) will count their investments in REITs (Real Estate Investment Trusts) as investments in equity fundsand other equity-related instruments, starting from January 1, 2026.

However, investments in InvITs (Infrastructure Investment Trusts) will still be classified as investments in hybrid instruments for mutual funds and SIFs.

The SEBI announced on Friday that any existing investments in REITs held by debt mutual fund schemes and investment strategies of SIF as of December 31, 2025, will be protected.

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Fund houses are encouraged to make efforts to remove REITs from their respective debt scheme portfolios. SEBI said, fund houses need to consider the current market conditions, liquidity and what investors want.

The regulator stated that the industry group AMFI should add REITs to the list of stocks classified according to their market capitalisation.

Asset Management Companies (AMCs) must issue an addendum to update the scheme documents and make necessary changes. This update will not be seen as a fundamental change to the scheme.

SEBI also stated that, " Any addition of REITs to the equity indices will only happen after a waiting period of six months, starting from July 1, 2026."

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