Regulatory Overlap And Legal Lacunae In Fractional Ownership And Tokenised Real- World Assets: A Critical Analysis Of The Securities Markets Code Bill, 2025
Vishal Baban Ovhal, Research Scholar, ABMS Parishad Yashwantrao Chavan Law College, Pune, Maharashtra
I. Introduction
The rapid emergence of tokenised real‐world assets (RWAs) and fractional ownership platforms has unsettled the boundaries of traditional securities regulation in India. Tokenisation allows the legal or beneficial interests in assets such as real estate, commodities, or financial instruments. The tokenization allows these assets to be represented as digital tokens on distributed ledger systems, enabling divisibility, programmability, and 24/7 transferability. In India, technological shift is unfolding along with the major legislative overhaul. The Securities Markets Code Bill, 2025 (“SMC Bill”), which proposes to consolidate the Securities and Exchange Board of India Act, 1992 (“SEBI Act”), Securities Contracts (Regulation) Act, 1956 (“SCRA”), and Depositories Act, 1996 into a unified code for capital markets.
The SMC Bill promises “one law, one market” through consolidation. It provides the regulatory landscape which is already grappling with the rise of fractional ownership platforms (FOPs), small and medium real estate investment trusts (SM‐REITs), and experimental frameworks for asset tokenisation. The SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2024 brought FOPs within the consideration of the SM‐REITs. It includes many pre‐existing structures risk, simultaneous classification as Collective Investment Schemes (CIS), SM‐REITs, or unregulated pooling vehicles. In parallel, the International Financial Services Centres Authority (IFSCA) has issued a consultation paper on “Regulatory Approach Towards Tokenization of Real‐World Assets” for entities operating within GIFT City. It highlights the distinct policy experiments at the international financial services. There remains no bespoke Indian statute governing tokenised RWAs. The issues raised in the Navigating Regulatory and Structural Gaps (Part I), Indian Rev. Corp. & Comm. L. Blog (Nov. 27, 2025) about the doctrinal uncertainty regarding the treatment of “securities,” “derivatives,” “goods,” or sui generis digital instruments.
