SEBI restores normal cut-off timings for mutual funds from November 9

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The Securities and Exchange Board of India on November 6 restored the normal cut off timings for mutual funds that had been revised during the lockdown due to the coronavirus.

“It is decided that the cut-off timings for applicability of NAV (Net Asset Value) for both subscription and redemption for all schemes, may be restored to normal cut-off timings on accordance with various circulars issued by SEBI in this regard,” Assistant Manager of Sebi’s IMD Bimal Prasad Panda wrote to AMFI.

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All asset management companies (AMCs) have been directed to issue a public notice highlighting the change in cut-off timings.

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According to the new Sebi circular, all cut-off timings have been restored to normal i.e. 3 pm from November 9 onwards. The respective changes are applicable to debts funds also.

In the circular issued on Friday, Sebi announced new Flexicap Category for equity MFs, which will be allowed to invest across market capitalisation (market caps) without sub-limit. However, multi-caps funds will have sub-limits across market caps with minimum mandated in each market cap.

Among other details, the capital market regulator eased norms for the mutual fund to launch either new funds if they want to launch Flexicap fund or rename any of existing MF scheme to Flexicap.

For debt funds, Sebi advised that all open-end debt funds will have to keep 10 percent liquid assets, while the stress test methodology will be decided by AMCs. The liquid assets which Sebi mentioned include cash, T-bills, Gsecs, among others. Sebi also exempted categories are Gilt funds, liquid funds and overnight funds saying they are 100 percent liquid.

On October 19, SEBI had restored the buying and selling time for all schemes other than debt mutual fund schemes and conservative hybrid funds to their normal cut-off time of 3 pm.

Following this, investors looking to purchase a liquid or overnight funds were provided with the option to place their order before 12:30 pm for availing the same day’s net asset value (NAV), while it was 1 pm for the redemption of liquid and overnight funds.

Similarly, to buy or sell units of debt mutual fund schemes and conservative hybrid funds, investors had the timings to place their orders before 1 pm only.

The capital markets regulator had trimmed the cut-off timing for purchases and redemption of mutual fund units in April amid the country-wide lockdown.