Due to recent SEBI regulations, we are announcing a change in the cut-off time for some mutual fund transactions effective immediately.
Background: As part of the many changes that SEBI enforced on the mutual fund industry starting October 1, fund houses are required to process the allottment of units for investments only when the funds are realized in their account. Previously service providers such as FundsIndia and payment gateways had a larger window for completing the fund transfer to get the same day NAV for transactions. Now, for certain transactions, this window has been shortened causing us to advance the cut-off time a bit.
Which transactions are affected?
All liquid fund transactions regardless of the investment amount will need to conform to the new cut-off time. All non-liquid fund transactions that are greater than or equal to Rs. 2 lakhs in value will also need to conform to the new cut-off time.
What is the new cut-off time?
The new cut-off time will be 1 PM.
How is the investment value calculated?
The 2 lakh threshold is applied on a per-scheme level. If you invest Rs. 1 lakh in five different schemes, they will not be affected by the new cut-off time.
An example?
- If you are investing in a liquid fund (any amount) by 1 PM on a business day, you will get the same day’s NAV.
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If you are investing in a liquid fund (any amount) by 1:30 PM on a business day, you will get the next day’s NAV.
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If you are investing in an equity fund for Rs. 2 lakhs by 1 PM on a business day, you will get the same day’s NAV.
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If you are investing in an equity fund for Rs. 1 lakh at 1:30 PM on a business day, you will get the same day’s NAV.
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If you are investing in an equity fund for Rs. 3 lakhs at 1:45 PM on a business day, you will get the next day’s NAV.
More questions? Please write to us at contact@fundsindia.com
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Sir,
I have invested in a few liquid funds on couple of occasions through the fundsindia platform. Most of the times I had been allotted the NAV of next working day even though I invested before the cut-off time of 1 PM. And on one occasion when I invested in multiple liquid funds (around 10) on a Friday before 1 PM, I got the NAV of Sunday. This simply means that I am loosing two days of bank interest OR two days of accrual. My source of argument was the following FAQ web page : http://pages.fundsindia.com/pages/faqs/what-is-your-cut-off-time-for-mutual-fund-transactions/
I contacted the customer care (help line number and the chat facility) but each time I got different reasons (most of them unacceptable) and links to Sebi documents explaining the entire process. Finally I gave up.
Hello Jaspreet, i shall forward your query to the appropriate person. Tks, Vidya
Hello sir,
Thanks for the question.
There is only one reason for getting Sunday’s NAV for a Friday liquid fund transaction – that is how SEBI wants AMCs to process these transactions. SEBI mandated this after large corporates were using this for their operational money – parking it in liquid funds over weekends when they won’t need the money and withdrawing on Monday. No productive economic activity could be realized with this money over the weekend, and SEBI wanted to put an end to this practice. The SEBI document that our customer support team forwarded to you is the circular describing what should be done.
It is an industry practice mandated by SEBI. FundsIndia has no influence or control over it.
Thanks,
Srikanth
Sir,
I have invested in a few liquid funds on couple of occasions through the fundsindia platform. Most of the times I had been allotted the NAV of next working day even though I invested before the cut-off time of 1 PM. And on one occasion when I invested in multiple liquid funds (around 10) on a Friday before 1 PM, I got the NAV of Sunday. This simply means that I am loosing two days of bank interest OR two days of accrual. My source of argument was the following FAQ web page : http://pages.fundsindia.com/pages/faqs/what-is-your-cut-off-time-for-mutual-fund-transactions/
I contacted the customer care (help line number and the chat facility) but each time I got different reasons (most of them unacceptable) and links to Sebi documents explaining the entire process. Finally I gave up.
Hello Jaspreet, i shall forward your query to the appropriate person. Tks, Vidya
Hello sir,
Thanks for the question.
There is only one reason for getting Sunday’s NAV for a Friday liquid fund transaction – that is how SEBI wants AMCs to process these transactions. SEBI mandated this after large corporates were using this for their operational money – parking it in liquid funds over weekends when they won’t need the money and withdrawing on Monday. No productive economic activity could be realized with this money over the weekend, and SEBI wanted to put an end to this practice. The SEBI document that our customer support team forwarded to you is the circular describing what should be done.
It is an industry practice mandated by SEBI. FundsIndia has no influence or control over it.
Thanks,
Srikanth