SEBI has introduced fresh rules for exchange traded funds from September 7 to improve transparency and protect investors. The regulator has revised the way base prices are calculated, introduced dynamic price bands, and added pre‑open auctions for gold and silver ETFs. These measures are designed to reduce volatility and ensure fairer pricing.
The base price will now be linked to the previous day’s closing value using the thirty‑minute volume weighted average price. If trades are missing in that period, the last traded price will be used. If no trades occurred on the previous day, the latest closing net asset value will apply. From April 1, 2027, SEBI plans to shift to the T‑1 NAV system.
Dynamic price bands have also been introduced. Equity and debt ETFs will have a ten percent band initially, expandable to twenty percent after cooling off. Overnight and liquid ETFs will have a fixed five percent band. Gold and silver ETFs will start with six percent, expandable in three percent steps without a ceiling.
Pre‑open call auctions for gold and silver ETFs will help balance demand and supply before trading begins. A standardized close‑out mechanism has also been added to handle settlement failures. These changes aim to align ETF prices with underlying assets, reduce sharp swings, and improve investor confidence.
