On Apr. 22, 2025, IND SEBI issued circular on revised NAV cut-off timings as above.
Changes aim to facilitate upstreaming of clients' funds by stock brokers/clearing members to clearing corporations; Master circular for mutual funds was modified.
Following cut-off timings for repurchase of units in liquid fund and overnight fund schemes: for applications received up to 3pm, closing NAV of day immediately preceding next business day; after 3pm, closing NAV of the next business day.
Received via online mode for overnight fund schemes, extended cut-off timing of 7pm.
The provisions will come into force from Jun. 1, 2025.
On Jan. 20, IND SEBI proposed extending redemption cut-off timing.
IND SEBI proposed extending cut-off timing for determining applicable net asset value (NAV) re mutual fund overnight schemes (MFOS) redemptions, from 3pm to 7pm.
Follows IND SEBI Dec. 2023 revised framework for upstreaming of funds, #162365.
Mutual Fund Overnight Schemes
Mutual fund overnight schemes offer a low-risk investment avenue for stock brokers (SBs) / clearing members (CMs), as funds are deployed in overnight tenure securities.
Namely, securities like government bond repos, overnight tri-party repo dealing and settlement (TREPS), ensuring client funds remain secure, withdrawable on demand.
Extension
The extension will allow SBs along with CMs sufficient time to un-pledge MFOS units as well as place redemption requests with mutual funds after market hours.
Overnight schemes do not need pre-market hours sale transactions for redemptions, as they utilize non-reinvestment of maturity proceeds on T+1 day to meet payouts.
Change in cut-off time does not impact fund valuation / ability to process redemptions, as overnight schemes handle redemptions without affecting daily fund investments.
Consultation Period
Comments and suggestions are to be submitted by Feb. 10, 2025.
Apr. 2025 Circular Issued
On Apr. 22, 2025, IND SEBI issued circular on revised NAV cut-off timings as above.
Changes aim to facilitate upstreaming of clients' funds by stock brokers/clearing members to clearing corporations; Master circular for mutual funds was modified.
Following cut-off timings for repurchase of units in liquid fund and overnight fund schemes: for applications received up to 3pm, closing NAV of day immediately preceding next business day; after 3pm, closing NAV of the next business day.
Received via online mode for overnight fund schemes, extended cut-off timing of 7pm.
The provisions will come into force from Jun. 1, 2025.
