SEBI aligns Gold ETF NAVs with domestic spot market, effective April 1, 2026

The Securities and Exchange Board of India (SEBI) has overhauled the valuation framework for physical gold and silver held by mutual fund schemes, directing asset management companies (AMCs) to shift to domestic spot prices published by recognised stock exchanges. The new rules will take effect from April 1, 2026.

The move marks a departure from the long-standing practice of referencing the London Bullion Market Association (LBMA) AM fixing prices, which are currently adjusted for currency conversion, customs duties, transportation costs and local taxes to arrive at a domestic valuation.

London benchmarks to Indian spot prices

Under the revised framework, mutual funds — including gold and silver ETFs — must value their physical bullion holdings using polled spot prices that are used for settling physically delivered gold and silver derivatives contracts on Indian exchanges.

As highlighted in Sebi's circular, "It has been decided that with effect from April 01, 2026... the mutual funds shall value physical gold and silver by using the polled spot prices published by the recognised stock exchanges which are used for settlement of physically delivered gold and silver derivatives contracts," Sebi stated. 

The shift is aimed at aligning fund valuations more closely with domestic price discovery mechanisms and reducing dependence on international benchmarks.

Industry participants say the change could narrow valuation gaps between ETF net asset values (NAVs) and actual domestic trading prices, improving transparency and boosting investor confidence in bullion-backed funds.

Why the change matters

At present, gold and silver ETFs in India derive valuations from LBMA AM fixing prices, adjusted for rupee conversion and local levies. While globally accepted, the methodology introduces multiple adjustment layers.

By mandating domestic spot prices used for physically delivered contracts, SEBI is effectively simplifying the valuation chain and anchoring it in Indian market realities. The change is expected to improve consistency across schemes and reduce pricing discrepancies during volatile global market movements.

For investors, especially those tracking gold and silver ETFs as tactical or long-term allocations, the revised methodology could lead to NAVs that better mirror domestic bullion trends.

Mutual fund overhaul

The bullion valuation reform is part of a wider revamp of mutual fund regulations announced by SEBI.

The regulator has introduced a new classification framework dividing schemes into five broad categories: equity, debt, hybrid, life cycle, and other schemes, along with Fund of Funds and passive products such as index funds and ETFs.

To enforce uniformity and prevent mislabelling, SEBI has mandated that scheme names must correspond directly to their respective categories. “For easy identification by investors… and to ensure that schemes remain ‘true-to-label’, the scheme name shall be the same as the scheme category,” the circular stated.

Further, fund houses have been barred from using return-focused phrases in scheme names. “Words/phrases that highlight/emphasise only the return aspect of the scheme shall not be used,” SEBI said, in a bid to curb aggressive marketing.

Solution-oriented schemes

SEBI has also scrapped the ‘Solution Oriented Schemes’ category. Existing schemes under this label must stop accepting fresh subscriptions and merge with similar schemes after obtaining regulatory approval.

In its place, the regulator has introduced Life Cycle Funds — open-ended schemes with pre-determined maturities and glide path strategies designed for goal-based investing.

Transparency norms

The new framework mandates monthly disclosure of portfolio overlap at the category level on AMC websites, with reporting at the ISIN level. Existing schemes must comply within six months. The Association of Mutual Funds in India (AMFI), in consultation with SEBI, will formulate a standardised implementation policy for the bullion valuation shift.

Taken together, the reforms signal SEBI’s push toward tighter standardisation, clearer labelling, and stronger investor protection — particularly in segments like gold and silver ETFs, where valuation benchmarks directly influence retail participation.