Gold, Silver ETFs to Navigate New Valuation Landscape Following SEBI's Regulatory Overhaul

SEBI Introduces New Framework for Valuing Gold and Silver ETFs

Effective Date: April 1, 2026

Key Highlights:

• The Securities and Exchange Board of India (SEBI) has introduced a new framework for valuing physical gold and silver held by mutual fund schemes, including Gold and Silver ETFs.
• The revised norms aim to make pricing more aligned with domestic market conditions, improve transparency, and standardise valuation practices across fund houses.

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Changes in Valuation Methodology:

• SEBI has modified the valuation methodology for physical gold and silver, shifting from international benchmark prices (London Bullion Market Association (LBMA) AM fixing prices) to domestically published pooled spot prices from recognised stock exchanges.
• The new framework will use pooled spot prices published by recognised Indian stock exchanges, currently provided by the Multi Commodity Exchange of India (MCX) and others.
• This approach will ensure uniform valuation across ETFs and aligns pricing more closely with actual domestic market prices.

Impact on Investors:

• The change does not alter how much gold or silver an ETF holds, nor does it affect the structure of the product.
• The update refines how the value of that bullion is calculated daily, potentially leading to more predictable and standardised NAV movements.
• For retail investors, the update represents a technical but meaningful shift towards greater accuracy and consistency in NAV returns.

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Regulatory Framework:

• The new norms will come into force from April 1, 2026, and are linked to Regulations 22(9) and 63(9), along with investment valuation norms outlined in the Seventh Schedule of the regulations.
• SEBI has stated that the Association of Mutual Funds in India (AMFI) will lay down a uniform policy for implementing the new valuation system.