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).

SEBI NAV applicability rule of 2021

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

The SEBI NAV applicability rule of 2021 is the SEBI reform that unified the applicable NAV framework for Indian mutual fund subscriptions onto a single principle: the applicable Net Asset Value is the NAV of the business day on which the subscription amount is realised in the AMC’s designated bank account, subject to the applicable cut-off time, regardless of the transaction submission time and regardless of the subscription size. The rule was introduced through SEBI Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2021/555 dated 17 February 2021 and took effect from 17 March 2021 for all investments, with a phased introduction for new investors from 1 February 2021. The reform consolidated two prior amending circulars (SEBI/HO/IMD/DF2/CIR/P/2020/175 dated 17 September 2020 introducing the realisation requirement for subscriptions of Rs 2 lakh and above, and SEBI/HO/IMD/DF2/CIR/P/2021/024 dated 5 March 2021 standardising the 3.00 p.m. cut-off across equity and debt schemes), and removed the prior Rs 2 lakh threshold below which the order-time-based rule had continued to apply.

Realisation of Funds on WebNotes

Applicable NAV and cut-off rules for Indian mutual funds

SEBI NAV applicability rule of 2021