SEBI said in a circular on Thursday that “Mutual Fund orders will soon get the NAV of the day when funds reach the asset managers and not of the day of application.” The new orders will be applicable from 1st January 2021.
Earlier, mutual funds orders less than ₹ 2 lakh got the NAV of the same day as the application, if placed within the cut-off period of time
The mutual funds had earlier temporarily changed the cut-off timings for buying and redeeming from 7th to 17th April, which was in line with RBI’s reduced trading hours for Money Markets and Forex Markets.
The investors had to put in their transaction requests early to avoid delays in purchases and redemption by a working day.
Therefore, the SEBI stated that “It has been decided that in respect of the purchase of units of mutual fund schemes, closing NAV of the day shall be applicable on which the funds are available for utilization, irrespective of the size, and time of receipt of such application.”
In the circular, the market regulator mentioned that the AMCs need to put in place a detailed written-down policy.
In addition, market regulator also stated that the policy is expected to include details of the specific activities and the roles and responsibilities of various teams engaged in fund management, dealing, compliance, risk management, back-office, etc.
It’s also mentioned that AMCs shall use an automated Order Management System, where the orders for equity and equity-related instruments of every scheme shall be placed by the fund managers of the respective schemes.