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SEBI Revises NAV Cut‑Off Timings for Mutual Fund Overnight Schemes

Summary: The Securities and Exchange Board of India (SEBI) has updated Net Asset Value (NAV) cut‑off timings for Overnight Mutual Fund Schemes (MFOS), effective June 1, 2025. Applications received up to 3:00 PM will be processed at the previous business day’s NAV, while those after 3:00 PM will use the next business day’s NAV. Online orders now benefit from an extended 7:00 PM cut‑off, ensuring smoother operations for brokers and investors.3

Overview

On April 22, 2025, SEBI issued Circular No. SEBI/HO/IMD/PoD2/P/CIR/2025/56 revising the cut‑off timings used to determine the applicable NAV for repurchase/redemption of units in MFOS schemes.4 The change aligns with upstreaming requirements for client funds by stock brokers and clearing members under SEBI’s December 12, 2023 circular.9

Key Changes in Cut‑Off Timings

  • 3 PM Standard Cut‑Off: Applications received up to 3:00 PM will use the previous business day’s NAV; those after 3:00 PM will use the next business day’s NAV.4
  • 7 PM Online Cut‑Off: Online applications for MFOS now enjoy a later cut‑off of 7:00 PM, giving brokers extra time to un‑pledge units and place redemption requests after market close.1
  • Effective Date: All asset management companies must implement these timing rules from June 1, 2025.3

Background & Rationale

SEBI’s upstreaming circular (Dec 12, 2023) requires brokers/CMs to upstream client funds to clearing corporations via cash, liened FDRs, or pledged MFOS units.9 A working group (AMFI & MFAC members) recommended NAV timing changes to operationalize pledging of MFOS units, followed by public consultation in early 2025.10

Impact on Stakeholders

Asset Management Companies (AMCs)

Clear NAV windows reduce allocation disputes, but AMCs must update back‑office systems to differentiate pre‑3 PM and post‑3 PM orders and tag online orders for 7 PM NAV.5

Stock Brokers & Clearing Members

Extended un‑pledge window post‑market lets brokers free up MFOS units and submit timely redemptions, lowering liquidity risk.6

Investors

Predictable NAVs help plan redemptions. Online 7 PM cut‑off caters to late‑day investors placing orders after work hours.7

How to Time Your Redemptions

  1. Place MFOS redemption requests before 3:00 PM for next‑day NAV or before 7:00 PM online for same‑day NAV.8
  2. Use AMC web portals or mobile apps to meet the 7 PM window.1
  3. Monitor broker notifications for cut‑off reminders.

References

  1. Upstox: SEBI announces changes in NAV cut‑off time for Mutual Fund Overnight Schemes
  2. AMFI: Cut‑off timings for Liquid & Overnight Funds
  3. TaxGuru: SEBI Revises Cut‑Off Timings for NAV in Overnight Mutual Fund Schemes
  4. SEBI Official: Change in cut‑off timings to determine applicable NAV
  5. Groww: SEBI Revises Mutual Fund Cut‑Off Timings – What You Need to Know
  6. SEBI News List: Consultation Paper & Circulars on NAV cut‑off timings
  7. CAMS Online: NAV applicability guidelines
  8. Fintech Primitives: NAV applicability framework
  9. SEBI Circular: Upstreaming of clients’ funds by SBs/CMs to Clearing Corporations
  10. DevRegTech: Upstreaming framework and operational guidelines

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