Home / Business and Economy / SEBI Unlocks Net Settlement for Mutual Funds
SEBI Unlocks Net Settlement for Mutual Funds
5 Nov
Summary
- Mutual funds can now settle cash market trades on a net basis.
- This facility was previously only available to foreign portfolio investors.
- Net settlement for mutual funds begins April 1, 2027.
India's mutual fund schemes are set to adopt net settlement for cash market trades starting April 1, 2027. This significant regulatory update, approved by SEBI, aims to improve market efficiency and reduce funding requirements for mutual funds.
The new rule extends a privilege formerly reserved for foreign portfolio investors. This change will allow mutual funds to streamline their settlement processes for specific security transactions.
SEBI has clarified that eligible transactions must involve either the sale or purchase of a single security. Importantly, netting across different schemes of the same fund will not be permitted under the new framework.
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