InvestorQ : What are the new rules on mutual fund NAV that SEBI has framed and how will it impact me as a mutual fund investors?
indhumathi Sayani made post

What are the new rules on mutual fund NAV that SEBI has framed and how will it impact me as a mutual fund investors?

Answer
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1 month ago


SEBI issued a special mutual fund circular to change the NAV rules and it has made some very interest changes effective from the 01 January 2021. Under the new rules, investors will get the purchase NAV of the day when investor's money reach AMC.

Therefore, the 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. This obviates the risk of smart institutional investors playing for NAV. This will not apply to liquid funds.

However, there are some exceptions you need to understand. In case of equity fund investments up to Rs.200,000. Such investors will get the NAV of the same day if application is submitted before 1 pm and the NAV of next day if investment is made after 1 pm.

In case of investments over Rs.200,000 the investor only gets the NAV of the day when the funds reaches the account of the AMC. That is why online transfers, IMPS transfers and NEFT transfers will be a better choice as they are more predictable.

The same rule will also apply to debt funds where the investments under Rs.2 lakh will be exempted from this rule. In the case of liquid funds and overnight funds, this cut off rule will not be applicable.