Global to local, SEBI shifts valuation of Gold, Silver held by Mutual Funds to domestic benchmarks

Global to local, SEBI shifts valuation of Gold, Silver held by Mutual Funds to domestic benchmarks

• SEBI changes gold, silver valuation for MFs to domestic spot prices
• New norms effective April 1, 2026 for mutual fund schemes
• Move seeks to enhance transparency and mirror local market trends.

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Market regulator Securities and Exchange Board of India (SEBI) has tweaked the valuation framework for physical gold and silver held by mutual fund schemes, shifting away from global benchmarks to domestic market-linked pricing.

In a circular issued today, the regulator said mutual funds will value physical gold and silver using polled spot prices published by recognised domestic stock exchanges. The move replaces the current practice of using London Bullion Market Association (LBMA) fixing prices with adjustments for currency, duties and local costs.

SEBI circular said the decision has been taken after deliberation in Mutual Fund Advisory Committee. Circular stated, “the mutual funds shall value physical Gold and Silver by using the polled spot prices published by the recognized stock exchanges which are used for settlement of physically delivered Gold and Silver derivatives contracts. The spot polling mechanism shall comply with the spot polling guidelines as specified by SEBI from time to time”.

SEBI said, it was deliberated in Mutual Fund Advisory Committee that polled spot prices published by recognized stock exchanges may be used for valuation of Gold and Silver held by mutual fund schemes. As stock exchanges are subject to transparency and compliance requirements under the regulatory framework, using the spot price published by such regulated entities shall lead to valuation reflective of domestic market conditions and also ensure uniformity in the valuation practices.

The new norms will come into force from April 1, 2026, alongside the implementation of the SEBI (Mutual Funds) Regulations, 2026.

SEBI said the change is aimed at improving transparency and ensuring valuations better reflect domestic market conditions. Industry body Association of Mutual Funds in India (AMFI), in consultation with SEBI, will prescribe a uniform policy for implementation.

Under the existing framework, physical Gold and Silver held by Gold and Silver Exchange Traded Funds (ETFs) is valued at prices of London Bullion Market Association (LBMA). The final valuation is arrived at after adjusting the LBMA prices with necessary metric and currency conversions, addition of transportation costs, customs duty, applicable taxes and levies and factoring notional premium or discount to arrive at domestic valuations.

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