Partner Helpdesk

Introduction:

The Mutual Fund industry regulator Securities and Exchange Board of India (SEBI) in partial modification to Circular No. SEBI/IMD/DF/21/2012 dated September 13, 2012, has come out with a new framework for uniformity in the applicability of NAV, across various schemes on the realization of funds and the provisions which came into effect from February 1, 2021. It directed that in respect of the purchase of units of mutual fund schemes (except liquid and overnight schemes), closing NAV of the day shall be applicable on which the funds are available for utilization irrespective of the size and time of receipt of such application.

FAQs

What exactly does this circular mean and how does it affect investors?

Let us first understand how the payment process works for Mutual Fund investments. When an investment is made the amount is first debited from the investor's bank account, goes to the payment gateway/clearing account and is then transferred to the bank account of the Mutual Fund. In the case of AssetPlus, the money goes to the account of Indian Clearing Corporation Limited (owned by Bombay Stock Exchange). This does not happen instantly and can take time anywhere between a few minutes to a few days depending upon the reconciliation process of the bank and ICCL(Indian Clearing Corporation Limited).

What payment modes are the fastest and can help you get the NAV of the same day?

For Lump sum purchases with the valid application, the following payment modes can help you get the same-day NAV (as long as the money is credited before 2 pm):

• RTGS, NEFT
• UPI Payments
• Online through a selected list of banks, which allow for instant payment credit: HDFC, ICICI, SBI, Axis, Kotak, Yes

This means that for all other payment modes, you may NOT receive the same day NAV and the transaction processing will be based on the date/time of receiving funds.

What happens in the case of SIPs?

No matter what the payment mode, you will receive the NAV of the day when money is received in the collection account of the fund, not when it was debited from your bank account. This is generally between 1 to 3 days post the debit from your account, depending on the mandates and banking settlement systems through which SIP Instalment debits are processed. The orders will appear on the client’s transaction page after fund realization.

When the SIPs will be auto-debited from your registered account?

The debit request is sent to the investor's bank account on the instalment date. After this, the amount will be auto-debited within 2-3 working days.

What happens in the case of Switches?

For switches, the applicable NAV will be based on when the switch-in scheme receives the funds from the switch-out scheme. The Switch-in scheme gets the money based on the payout cycle of switch-out schemes, similar to redemption payouts. This means that the date when the money gets switched out is the earliest possible date of the applicable NAV for the switch-in.

What happens in the case of NFOs?

For NFO subscriptions (during the initial NFO period), the allotment date will be considered for the applicable NAV irrespective of credit date or application submission date.

Please note, unit allotment and updated account statements after the unit allotment will only be available once the transaction is processed based on receipt of funds into the collection account of the fund, depending on your mode of payment.

What are the cutoff times as per the new rule?

New NAV applicability matrix