Sebi directs mutual funds to use domestic spot prices for gold, silver ETF valuation from April 1
Feb 26, 2026
Synopsis
Sebi has revised valuation norms for physical gold and silver held by mutual funds, mandating use of domestic polled spot prices from recognised exchanges instead of London benchmarks. The move aims to enhance transparency, reflect local market conditions and standardise industry practices.
Mutual funds will value physical gold and silver using domestic exchange spot prices, replacing London benchmarks to improve transparency, consistency and alignment with Indian market conditions.
Capital markets regulator Sebi has revised the valuation framework for physical gold and silver held by mutual fund schemes, directing fund houses to use polled spot prices published by recognised stock exchanges instead of the London benchmark.
To read the circular, click here
In a circular dated February 26, Sebi said that with effect from April 1, mutual funds must value physical gold and silver using the polled spot prices published by recognised stock exchanges that are used for settling physically delivered gold and silver derivatives contracts.
At present, physical gold and silver held by Gold and Silver exchange traded funds (ETFs) are valued based on the AM fixing prices of the London Bullion Market Association. The final valuation is derived after adjusting the LBMA prices for metric and currency conversions, transportation costs, customs duty, taxes and levies, along with notional premium or discount to arrive at domestic prices.
The regulator said that following discussions in the Mutual Fund Advisory Committee, public consultation and deliberations with stakeholders, it was decided that domestic polled spot prices published by recognised exchanges may be used for valuation. Since stock exchanges operate under transparency and compliance requirements, Sebi said this approach would ensure valuations reflect domestic market conditions and bring uniformity in practices.
The regulator also clarified that the spot polling mechanism must comply with spot polling guidelines specified by Sebi from time to time. The Association of Mutual Funds in India, in consultation with Sebi, will prescribe a uniform policy to operationalise the transition.
The shift marks a move away from reliance on international bullion benchmarks for calculating the daily net asset value of gold and silver schemes.
[The Economic Times]
