The new timings will take effect from June 1, 2025.
This move is linked to SEBI’s ongoing efforts to strengthen the safety of client funds held with brokers and clearing members.
What will change?
Earlier, mutual fund houses applied the NAV based on a uniform cut-off time across channels. Now, SEBI has introduced separate cut-off timings for online and offline redemption requests in overnight schemes.
Here’s the revised schedule:
Offline or physical mode:
- Redemption requests submitted before 3:00 PM will get the closing NAV of the day preceding the next business day.
- Requests made after 3:00 PM will receive the NAV of the next business day.
Online mode (only for overnight funds):
- Investors have time till 7:00 PM to get the same-day benefit.
- Requests placed after 7:00 PM will get the NAV of the next business day.
Note: A “business day” excludes days when money markets are closed or not accessible.
Why this change?
This revision stems from SEBI’s upstreaming framework, introduced in December 2023. The regulator mandated that all client funds with stock brokers and clearing members must be transferred at the end of each day to clearing corporations.
The transfer or “upstreaming” can happen in the form of:
To enable the use of overnight fund units for this purpose, SEBI needed to align the redemption cut-off timing.
A working group including AMFI and the Mutual Funds Advisory Committee had recommended the change, which was later released for public consultation before final approval.
What this means for investors?
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.
First Published: Apr 24, 2025 10:22 AM IST