Applicable NAV on WebNotes

Applicable NAV (cut-off rule) in mutual funds

Mon, 18 May 2026 00:00:00 +0000

The applicable NAV cut-off rule determines which business day’s Net Asset Value applies to a mutual fund subscription or redemption order. The rule is critical for investors timing transactions: an order placed five minutes before the cut-off receives that day’s NAV; an order placed five minutes after receives the next day’s NAV. In volatile markets, a one-day NAV difference can be material.

SEBI’s framework prescribes different cut-off timings by scheme type. The current rules, as amended by SEBI in February 2021, require not just timely order placement but also timely fund realisation in the AMC’s collection account. This article covers the cut-off timings, the February 2021 amendment, the practical implications across direct-plan platforms, and the operational considerations.

Cut-off time rules for mutual fund transactions

Mon, 18 May 2026 00:00:00 +0000

Cut-off time rules in Indian mutual funds prescribe the timing by which a subscription or redemption order must be received (and funds realised) to qualify for that business day’s applicable NAV . SEBI’s cut-off framework distinguishes between equity and non-liquid debt schemes (cut-off 3:00 pm) and liquid/overnight schemes (cut-off 1:30 pm), with the February 2021 amendment requiring not just order receipt but also actual fund realisation in the AMC’s collection account.

Applicable NAV and cut-off rules for Indian mutual funds

Sat, 16 May 2026 00:00:00 +0000

The applicable NAV of a mutual fund transaction in India is the Net Asset Value (NAV) at which a specific subscription, redemption, or switch is processed. Because NAV is computed once per business day after market close under Regulation 47 of the SEBI (Mutual Funds) Regulations, 1996 , the SEBI-mandated cut-off time rules determine whether a transaction uses the same-day NAV or the next business day’s NAV. The applicable-NAV framework was substantially tightened by SEBI Circular SEBI/HO/IMD/DF2/CIR/P/2020/175 dated 17 September 2020 (effective 1 February 2021), which introduced the realisation-of-funds requirement that anchors the same-day NAV applicability to the time of funds credit in the AMC’s collection account rather than to the time of order submission. Subsequent uniform cut-off rules were standardised by SEBI Circular SEBI/HO/IMD/DF2/CIR/P/2021/024 dated 5 March 2021, and the consolidated framework is reissued in the SEBI Master Circular on Mutual Funds (most recently May 2024).

Net Asset Value of an Indian mutual fund

Sat, 16 May 2026 00:00:00 +0000

The Net Asset Value (NAV) of an Indian mutual fund is the per-unit value of a scheme on a given valuation date, computed as the total market value of the scheme’s assets less its liabilities divided by the number of units outstanding at the end of the prior business day. NAV is the single reference price at which all transactions in an open-ended scheme (subscription, redemption, switch, SIP , STP, SWP) are processed, and the principal data point on which scheme returns, fact-sheet performance, and inter-scheme comparison are based.