Regulatory & Compliance
A Note on Regulation
How RealX fits within existing Indian law today — and why we welcome proper regulation when a framework is created for us
We have taken care in building RealX within the ambit of the extant laws available to us. Being built on base established laws of today, the RealX structure is therefore compliant with all applicable laws.
The legal construct of RealX is unique to it and has taken us a couple of years of work to get there. At the moment there isn’t any regulatory framework that we can be licensed under. However, we would be keen to get under active regulatory supervision once a framework is created for us.
Our Position
Why don’t we fall under regulation?
Simply put, RealX does not fall under any extant regulations (until new ones are made for us) because of three reasons:
1
Your money, your choice
You and only you decide where to invest your money. There is no blind investing or pooling as a fund or trusting any fund manager here. Your money, your choice, your decision and its your property
2
Direct co-ownership on the property
The RealX structure creates a direct co-ownership on the property. So the ownership (or rights for it), rest solely in your hands. Everything else is a support function — essentially helping you with property administration
3
You control key decisions
All key decisions regarding the ownership and tenancy are taken by you. Just like shareholders in a company, the co-owners of the property are free to keep their stake or sell it at their will as well as vote to decide on all important matters.
Even without direct regulations, we think we can do a whole lot to create a better environment for our investors to invest with confidence at RealX.
Investor Protection
Some of the best features of how we do things at RealX
Standard frameworks, clear roles, and mechanisms designed so you know what to expect.
Separation of ownership representation and platform functions
RealX created a separate Registered Trust to carry on the fiduciary functions related to property ownership. The trustee (generally a corporate trustee), will need to ensure they always act as per the Trust clauses and not on what RealX says. This creates a separation of functions, commitments, control and interest
Maker-Checker in all key functions
No major action can be unilaterally taken by any entity, be the Trustee, Asset Manager or even RealX. Most of such functions require one entity to initiate an action and another to approve it even before these are placed before investors
Each property is designed as a DAO
All investors in a property become part of a DAO (Distributed Autonomous Organisation) wherein they together can take all key decisions regarding their collective ownership of the property as a whole. Having said that all investors hold their co-ownerships (or co-ownership rights) as freehold assets and they can individually decide to hold or sell them
RealX and its ecosystem, have simply created a standard framework (of rights, responsibilities and platform rules), for all of you to come together and invest. This helps you invest with confidence knowing very well that the standard framework ensures you know what to expect from other investors who may co-invest with you as well as sets the expected behaviour from everyone else involved in the process.
And we do our best in terms of curation of such properties, oversight of all functional players and intermediaries as well as create efficient mechanisms for fund transfer etc
Looking Ahead
Will we be regulated?
Regulation is a good thing. It creates more confidence for investors and protects the interests of investors as well as every other participant in the market.
We are at an early stage of evolution of this product and we believe prudent regulations will follow once the market gains traction enough. We would only be too happy to work with the regulators and governments to support proper regulations for the industry.