Strata SM REIT No Longer a SEBI-Regulated Intermediary
New Delhi, May 14—The Securities and Exchange Board of India (SEBI) on Wednesday issued a cautionary advisory to investors, warning them against engaging with Strata Small and Medium Real Estate Investment Trust (SM REIT). The advisory states that the entity is no longer a registered or regulated intermediary.This development follows SEBI's review of certain legal proceedings involving the promoter of Strata SM REIT. In response, SEBI discussed the situation with the trust’s independent director, compliance officers, and trustee.
Strata Surrenders SM REIT Registration
Following this engagement, Strata SM REIT voluntarily surrendered its certificate of registration. SEBI clarified that the entity must not portray itself as a SEBI-regulated SM REIT or intermediary going forward.“Strata SM REIT has surrendered its certificate of registration and will not hold out or represent itself as a SEBI-regulated intermediary or SM REIT,” the regulator confirmed in its official statement.
No Schemes Launched or Migrated Under SM REIT Framework
SEBI further noted that Strata SM REIT has not launched any schemes under the SM REIT structure yet, nor has it transitioned any pre-existing fractional real estate investments into SEBI-recognised SM REIT schemes.Background on SM REIT Framework
Strata had been registered under SEBI’s newly introduced SM REIT category, which aims to democratize access to mid-sized real estate assets valued between ₹50 crore and ₹500 crore. This subclass within the broader REIT structure mandates listing units on stock exchanges, with a minimum investment size of ₹10 lakh per unit.Under SEBI guidelines, SM REITs are restricted from investing in under-construction properties or land and must distribute at least 95% of their earnings to unit holders.
SEBI Advisory to Investors
Given the developments, SEBI has urged investors to exercise caution when dealing with Strata SM REIT, emphasizing the entity’s current unregulated status.Investors are advised to verify the regulatory status of entities before making investment decisions in the alternative real estate asset class.