SEBI Revises Cut-off Timings for Overnight MF Schemes
Moneylife Digital Team 23 April 2025
Market regulator Securities and Exchange Board of India (SEBI) has revised the cut-off timings for determining the applicable net asset value (NAV) for repurchase or redemption of units in overnight mutual fund schemes (MFOS). This revision is part of the operational rollout of the new upstreaming framework introduced for stockbrokers (SBs) and clearing members (CMs), the regulator says.
 
On 12 December 2023, SEBI issued a circular that required stockbrokers and clearing members to ‘upstream’ or transfer all clear credit balances of their clients to clearing corporations at the end of each day. This rule is designed to safeguard investors by ensuring that their funds are either held in cash, secured through fixed deposit receipts, or invested in MFOS and pledged accordingly.
 
To help this process run smoothly, SEBI, along with a working group from the mutual fund industry and the Association of Mutual Funds in India (AMFI), proposed adjusting the cut-off timings that determine which NAV applies when investors redeem their units from overnight funds.
 
After reviewing feedback from the public, SEBI has updated its master circular for mutual funds dated 27 June 2024 to reflect the new cut-off timings for overnight and liquid fund schemes:
  • If the repurchase request is received before 3pm, the NAV applied will be that of the day before the next business day.
  • If the request comes after 3pm, the NAV of the next business day will be used.
  • For online transactions specifically involving overnight funds, the cut-off is extended to 7pm.
 
A business day is defined as a day when the money markets are open and accessible.
 
These changes will come into effect from 1 June 2025.
 
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