Capital markets regulator Sebi on Friday came out with guidelines pertaining to applicability of intra-day net asset value for transactions in units of Exchange Traded Funds (ETFs) directly with asset management companies.
The decision has been taken based on feedback received from the mutual fund industry and recommendations of Sebi’s mutual fund advisory committee, according to a circular.
For transactions in units of ETFs by authorised participants and large investor directly with AMCs (Asset Management Companies), Sebi said “intra-day NAV (Net Asset Value), based on the executed price at which the securities representing the underlying index or underlying commodity(ies) are purchased/ sold, shall be applicable”.
The industry has provided a feedback that for transactions in units of ETFs by authorised participants and large investors directly with the AMCs, ‘closing NAV of the day’ may not be relevant as these transactions are based on price at which the securities representing the underlying index or underlying commodity(ies), are purchased or sold.
The regulator said that appropriate disclosures in this regard will have to be provided in the scheme information document, key information memorandum and common application form.