Starting April 1, 2026, the Securities and Exchange Board of India (SEBI) has introduced a new framework for valuing gold and silver ETFs. Earlier, fund houses calculated net asset values (NAVs) using the London Bullion Market Association (LBMA) prices, adjusted for currency changes, import duties, taxes, and premiums. That system was layered and often created small differences across schemes.
Now, SEBI mandates that mutual funds and ETFs must use spot prices published by Indian stock exchanges. These prices are discovered through a regulated polling mechanism used for settling physically delivered bullion contracts. This change ensures valuations are based on domestic market realities rather than international benchmarks.
Why SEBI Made the Change
– Transparency: Exchange-published spot prices are regulated and disclosed openly.
– Uniformity: All schemes will follow the same valuation method.
– Local relevance: NAVs will reflect Indian bullion prices, which often differ from global rates due to currency and import costs.
Impact on Investors
For investors, no immediate action is required. However, returns will now track local gold and silver prices more closely, making comparisons across ETFs easier. The move also reduces minor variations caused by different valuation practices and improves tracking efficiency over time.
In short, SEBI’s step makes ETF valuations simpler, fairer, and more India-focused, benefiting both fund houses and investors.