After the RBI announced a change in trading hours for various markets, Securities and Exchange Board of India has decided to reduce the cut-off timing for subscription as well as redemption in various mutual fund schemes.
After the Reserve Bank of India (RBI) announced a change in trading hours for various markets, Securities and Exchange Board of India has decided to reduce the cut-off timing for subscription as well as redemption in various mutual fund schemes. With the move, the cut-off timing has been brought forward for both equity and debt funds. Now, if investors are looking to purchase liquid funds and overnight funds, the cut off time has been advanced to 12:30 PM. For the orders placed post the revised time-limit, NAV of the same day will be applicable. The revised timing will be effective from April 7, to April 17, both days inclusive.
Investors looking to purchase debt, equity or hybrid funds, the cut-off has been revised to 1 PM, said Association of Mutual Funds in India (AMFI) in an update on its website. If an order is placed after the revised timing has expired, the new NAV will be applicable. On the other hand, SEBI has also revised the timing for redemption of all mutual funds to 1 PM till April 17.
SEBI’s move comes after the central bank, on Friday, announced a change in trading hours for various markets. “The unprecedented situation created by the COVID-19 outbreak has necessitated lockdowns, social distancing, restrictions on movement of people and non-essential activities, work from home arrangements and business continuity plans. The resultant dislocations have adversely impacted the functioning of financial markets. Staff and IT resources have been severely affected, posing operational and logistic risks. The thinning out of activity is impacting market liquidity and increasing volatility of financial prices,” RBI said in a press release.
Under RBI’s revised trading hours, commercial papers and certificates of deposits will be traded between 10 AM to 2 PM, the change also applies to: market repo in government securities; call/notice/term money; tri-party repo in government securities; repo in corporate bonds; foreign currency; foreign interest rate derivatives and government securities.