The Securities and Exchange Board of India (“SEBI”), in the exercise of its powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 49 of SEBI (Mutual Funds) Regulations, 1996, vide Circular No. SEBI/HO/IMD/PoD2/P/CIR/2025,[1] dated April 22, 2025, issued the changes in cut-off timings for redemption in overnight mutual fund schemes (“Circular”). The provisions laid down hereunder shall come into effect on June 01, 2025.
I. Background
This Circular has been issued pursuant to SEBI’s circular dated December 12, 2023, on “Upstreaming of Clients’ Funds by Stock Brokers (SBs)/ Clearing Members (CMs) to Clearing Corporations (CCs)”, which mandated that client funds must be up streamed in the form of Cash, Lien on Fixed Deposit Receipts (FDRs), or pledge of units of Mutual Fund Overnight Schemes (“MFOS”).
To operationalize the pledge of MFOS units, SEBI has now amended the cut-off timings for NAV applicability on redemptions from such schemes, based on industry recommendations and public consultation.
II. Key Amendment (Modification to Para 8.4.5.4 of SEBI’s Master Circular dated June 27, 2024)
Revised Cut-off Timings for Redemption from Liquid and Overnight Funds:
| Application Receipt Time | Applicable NAV |
| Up to 3:00 PM | Closing NAV of day immediately preceding the next business day |
| After 3:00 PM | Closing NAV of the next business day |
| For online mode (Overnight Schemes), the extended cut-off time shall be 7:00 PM | |
[1]https://www.sebi.gov.in/legal/circulars/mar-2025/extension-of-timelines-for-submission-of-offsite-inspection-data_93100.html