What’s changing?
Earlier, fund houses followed a uniform cut-off across both online and offline modes. That ends now.
SEBI has introduced separate cut-off timings:
Offline mode (physical requests):
- Submit by 3:00 PM: Get previous day’s NAV of the next business day.
- Submit after 3:00 PM: Get next business day’s NAV.
Online mode (overnight schemes only):
- Submit by 7:00 PM: Get same-day NAV.
- Submit after 7:00 PM: Get next business day’s NAV.
A business day excludes days when money markets are shut.
Why this change?
The new rule supports SEBI’s upstreaming framework, in effect since December 2023. It requires brokers and clearing members to transfer all client funds to clearing corporations by day-end.
These transfers can be in:
- Cash
- Fixed deposit liens
- Pledged units of Overnight Mutual Fund Schemes
To make pledged fund units usable, SEBI needed to align redemption timings with the clearing process.
A working group, including AMFI, recommended this change, which followed a round of public consultation.
What this means for you?
If you redeem your investments in overnight or liquid funds, timing now plays a more crucial role:
Online investors get more flexibility with the 7 PM cut-off.
Offline investors must stick to the 3 PM window to avoid NAV delays.
Submitting requests after the cut-off time will affect which day’s NAV gets applied and that could impact returns.