Mutual Fund Investor to Get NAV after Fund Reaches to AMC

   As per the recent Circular [1] by Securities and Exchange Board of India (SEBI) on 17th September 2020 from 1st January 2020 Net Asset Value (NAV) of Mutual fund of a particular day will be allotted to investor only after the funds reach the Mutual Fund AMC.

This circular is issued to get rid for the small investor who were allowed to purchase Mutual Fund below Rs 2 Lakhs (other than liquid and overnight fund) even if the fund doesn’t reach the Mutual Fund AMC as per the earlier provisions. Polices and Cut-off time for Liquid and Overnight fund will be same as old and there are no changes made for them.

SEBI has brought this policy in order to treat all the investor as equal manner. Also, the Board of AMC as well as Trustee should approve such policies.

The interpretation of above is that if a investor makes a purchase of Mutual Fund before 1:00 PM then he will get NAV of the same day and if the investor makes a purchase of Mutual Fund after 1:00 PM then he will get NAV of next day. It is advised to the investor to do transaction well before 1:00 PM because sometime transfer of funds takes time and AMC may get Funds after 1:00 PM, so the investor may lose the opportunity for 1 day.

 

 

-Akash Girish Doshi

 

Reference –

[1] h ttps://www.sebi.gov.in/legal/circulars/sep-2020/circular-on-mutual-funds_47574.html