SEBI Revises Cut-Off Timings for Mutual Fund Overnight Schemes

SEBI has amended the cut-off timings for determining net asset value (NAV) in mutual fund overnight schemes for redemption requests. The new timings aim to facilitate stock brokers and clearing members in managing such requests efficiently. The changes will be effective from June 1.

The Securities and Exchange Board of India (SEBI) announced on Tuesday a pivotal amendment in the cut-off timings for determining the net asset value (NAV) of mutual fund overnight schemes. This change is focused on repurchase or redemptions of units in such schemes.

The modification permits stock brokers and clearing members the needed time to un-pledge Mutual Fund Overnight Schemes (MFOS) units and place redemption requests after the market closes. According to SEBI's circular, applications received by 3 pm will use the previous day's NAV, while those received after 3 pm will consider the next business day's NAV.

Moreover, for online submissions, a 7 pm cut-off will be applied for overnight fund schemes. Effective June 1, this initiative offers a safer investment pathway for stock brokers, ensuring client funds are minimally exposed to risk due to their investment in government securities.

(With inputs from agencies.)