SEBI proposes net settlement of funds for mutual fund cash-market trades
CNBC-TV18 1 hr ago·3 Sept 2026, 1:15 pm
The Securities and Exchange Board of India (SEBI) has proposed a new rule allowing mutual fund schemes to net-settle funds for their cash-market trades. Currently, funds must settle every transaction individually, which ties up capital. The new proposal would allow funds to offset payments and receipts for multiple trades on the same day, settling only the net amount. This change aims to reduce the need for interim liquidity and improve the overall efficiency of the settlement cycle.
This move is significant for investors as it could lower the cost of funds for mutual funds. By reducing the amount of cash required to be held for settlement, funds may be able to invest more money in securities, potentially improving returns. It also simplifies the accounting process for fund houses, making operations smoother and more streamlined.
Investors should watch for the final implementation of this circular. While it promises better operational efficiency, the actual impact on fund performance will depend on how asset management companies utilize the freed-up liquidity. It is a positive step towards modernizing market infrastructure, but its long-term benefits will become clearer once the rule is in place.
Key takeaways
- Category: Sector.
- AI reads the tone as positive (potentially bullish) for the stock.
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