SEBI: Gold and silver prices will now be determined by local rates, not London rates; SEBI takes a major decision..

Market regulator Securities and Exchange Board of India (SEBI) has made a major change to the rules governing the valuation of gold and silver held in mutual funds. These precious metals will now be priced based on Indian market prices instead of the London market. This new rule will come into effect on April 1, 2026.

What happens now?
Previously, the price of physical gold and silver held in mutual fund schemes was determined by the London Bullion Market (LBMA) price. This international price was converted into Indian rupees. Transport costs, customs duties, taxes, and other domestic costs were added to determine the final value. This means the valuation was based on a foreign benchmark, which was then adjusted to Indian conditions.

What will change now?
According to the new rules, mutual fund companies will now use the spot price issued by Indian stock exchanges (such as the NSE or BSE). According to a SEBI circular, this decision was taken after discussion within the Mutual Fund Advisory Committee. The circular states that mutual funds will value physical gold and silver based on the polled spot prices published by recognized stock exchanges, which are used for settlement of physically delivered gold and silver derivative contracts.

What benefits will the new rule bring?
Accurate prices: Now you will receive the actual price prevailing in the Indian domestic market.
Transparency: Indian stock exchanges operate under SEBI regulations, which will increase price transparency.
Controlling sudden fluctuations: SEBI has also proposed a price band and a 15-minute cooling-off period for prices. This will protect investors during sudden, sharp drops or surges in the market.

Easy to understand:
ETFs (exchange-traded funds) are funds that trade on exchanges. They track an index (such as Nifty, Sensex), gold-silver, or sector, providing investors with diversification and high liquidity at a low cost.

Trades on a stock exchange like shares.
A single ETF can hold multiple stocks or commodities.
Diversified investments at a low cost.
Buy and sell anytime, as long as the market is open.

Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.