Sebi Updates Mutual Fund NAV Rules: Same-Day NAV Applicability

The Securities and Exchange Board of India (Sebi) recently revised certain rules regarding the NAV applicability of your mutual fund investments.

In a circular dated September 17, Sebi said that the same day net asset value (NAV) is applicable on your mutual fund investments only if your money reaches the fund house on the same day. This change was earlier applicable from January 1, 2021, but is now effective January 29, 3.00 p.m.

“Closing NAV of the day shall be applicable on which the funds are available for utilisation irrespective of the size and time of receipt of such application,” said Sebi in a circular.

This circular also mentions that there will be no change in the existing NAV cut-off timings and NAV applicability for liquid and overnight funds.

Liquid fund orders placed before cut-off gives you previous day(historic nav) mutual fund investments and for all other mutual funds you get the same-day NAV.

Read more on Groww: SEBI Revises Mutual Fund Cut-off Timings

There were a few other changes that Sebi introduced in the circular. 

Equity and Equity-related Orders

Mutual fund companies shall implement an Order Management System” (OMS) where the orders for each mutual fund scheme will be placed by the respective fund managers. In case a fund manager is managing more than one fund, he or she will have to place scheme-wise orders. OMS will be an automated system where all the details mentioned in the SID will be built-in.

Compliance Monitoring System

All AMCs shall implement a  monitoring mechanism to ensure that Sebi’s orders mentioned in this circular are being followed. Such a system will be able to audit the trail of activities preceding an order placement, allocation and trade execution. The system will also be able to record the time when the order is placed by the fund manager, when the order is placed by the dealer, the execution of the order and when the trade is allocated.