The new rules mandate fund houses to use exchange-published polled spot prices—sourced from recognised domestic stock exchanges—for valuing underlying bullion.
This replaces the earlier system that relied on international benchmarks.
What changes from today
Under the revised norms, mutual funds and ETFs will now base valuations on spot prices discovered within India, rather than referencing global benchmarks such as the London Bullion Market Association (LBMA).
Until now, NAV calculations used LBMA’s AM fixing prices, adjusted for currency movements, import duties, taxes, transportation costs and small premiums or discounts. From today, that layered approach gives way to a more direct domestic pricing mechanism.
The spot prices will be derived through a regulated polling system used by stock exchanges for settling physically delivered gold and silver derivatives contracts.
Why SEBI made the change
SEBI has said the move aims to improve transparency and standardisation in valuation practices across mutual fund schemes.
Since stock exchanges operate under regulatory oversight and disclosure norms, using their spot prices is expected to better reflect domestic market conditions. The regulator also noted that a uniform valuation approach can reduce inconsistencies across schemes.
The decision follows consultations with stakeholders and recommendations from the Mutual Fund Advisory Committee.
Impact on ETF investors
For investors in gold and silver ETFs, the shift is unlikely to require any immediate action, but it changes how returns are measured.
NAVs will now align more closely with local bullion prices, which often diverge from global benchmarks due to currency fluctuations and import-related costs. This could improve comparability across schemes and make pricing more intuitive for investors tracking domestic markets.
Market participants say the move may also help reduce minor return variations caused by differing valuation methodologies and improve tracking efficiency over time.
