Sebi exempts closing day NAV in ETFs for large investors
Sebi has issued a circular exempting the applicability of closing day NAV on transactions in the ETF units by the large investors directly with AMCs.
Market regulator Securities and Exchange Board of India (Sebi) has issued guidelines with respect to closing day net asset value (NAV) transactions in the units of exchange traded funds (ETFs) with the asset management companies (AMCs). On 30 July, Sebi issued a circular exempting the applicability of closing day NAV on transactions in the ETF units by the large investors and authorised investors directly with the AMCs.
“The closing NAV of the day may not be relevant, as the ETF transactions by authorised participants and large investors directly with the AMCs are based on the price at which the securities representing the underlying index or underlying commodities are purchased or sold,” according to the feedback submitted by the industry on closing NAVs. Based on this feedback the decision was made by the market regulator.
The Sebi exempted the applicability of closing day NAV on these transactions as per the recommendations of the Mutual Fund Advisory Committee.
Scheme information document, key information memorandum, and common application form will provide appropriate disclosure in this regard, it said.