SEBI rule change from April 1: What it means for your gold and silver ETF returns? All you need to know

Wed Apr 01 2026

The Securities and Exchange Board of India (Sebi) has updated the valuation framework for physical gold and silver held by mutual fund schemes, requiring the use of exchange-published polled spot prices to determine their value.

The new norms will replace the current benchmark-linked approach and are intended to bring greater uniformity while ensuring valuations better reflect domestic market conditions.

What is the new rule?

In a circular issued on Thursday, February 26, the market regulator said, "It has been decided that with effect from April 01, 2026...the mutual funds shall value physical gold and silver by using the polled spot prices published by the recognised stock exchanges which are used for settlement of physically delivered gold and silver derivatives contracts."

Sebi added that the spot polling mechanism must adhere to the guidelines specified by the regulator from time to time. The move, aligned with the Sebi (Mutual Funds) Regulations, 2026, aims to ensure valuations better reflect domestic market conditions and promote uniformity and transparency.

Explaining the rationale, Sebi said that since stock exchanges are subject to transparency and compliance requirements under the regulatory framework, "using the spot price published by such regulated entities shall lead to valuation reflective of domestic market conditions and also ensure uniformity in the valuation practices."

Transition from LBMA-based pricing

Currently, gold and silver ETFs (exchange traded funds) value their holdings based on the AM fixing prices of the London Bullion Market Association (LBMA), adjusted for currency conversion, transportation costs, customs duty, taxes and other levies to arrive at domestic prices.

When will the new norms take effect?

This will become effective from April 1, 2026, the Securities and Exchange Board of India (Sebi) said in its circular.

The change is in line with the implementation of the SEBI (Mutual Funds) Regulations, 2026, which were notified earlier this year.

What Sebi’s change means for gold and silver ETF investors?

Under the new Sebi norms, gold and silver ETFs will be valued based on domestic exchange spot prices rather than international benchmarks. For investors, this enhances transparency and consistency in Net Asset Value (NAV) calculations, making scheme comparisons easier.

Market experts point out that although gold and silver ETFs track underlying metal prices, variations in valuation methods, tracking efficiency, and liquidity can lead to slight differences in returns across schemes. A uniform spot-based valuation mechanism could help minimise these discrepancies and improve comparability for investors.

Implementation

Mutual fund industry body Association of Mutual Funds in India (AMFI), in consultation with Sebi, will prescribe a uniform policy for implementation.

Source: https://www.msn.com/