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SEBI diktat: MF investors to get units only when schemes receive the funds

Unless intermediaries and platform providers tweak their systems, investors would not be able to get same-day’s NAVs

September 23, 2020 / 08:03 PM IST

If you are a mutual fund (MF) investor, you will now have to wait for a little longer to get your allotted units.

Last week, the Securities and Exchange Board of India (SEBI) said that MF investors would get units at the net asset value (NAV) of the day on which your amount gets credited to the MF scheme’s bank account. Earlier, this rule was only applicable for investments of over Rs 2 lakh. At the same time, any investment below this threshold could get the same day’s NAV as long as the transaction is initiated before the cut-off time. Presently, the cut-off 1 pm due to the COVID-19 crisis; the usual time was 3 pm earlier.

Even though SEBI’s move is aimed at bringing uniformity in the way NAVs are assigned, it would impact investors in differing ways depending upon their route of investment. Unless MF platforms and intermediaries are able to re-align their systems, investors would only be able to get same-day NAVs in very few cases. For now, if markets fall on a particular day and you wish to take advantage of the decline and invest some amount on the same day, it would only be possible in some scenarios from January 1, 2021: the day on which this rule comes into force.

I make online payments. So, I should get the same day’s NAV, right?