Covid-19: Sebi curtails cut-off timings for mutual funds from 3 pm to 1 pm

Equity scheme investors will have to invest before 1 pm to get same day's net asset value

The Securities and Exchange Board of India (Sebi) has allowed mutual funds (MFs) to change the cut-off timings for equity and debt schemes from 3pm to 1pm and for liquid and overnight schemes to 12.30pm from 1.30pm. The move comes following the MF industry's request to Sebi to reduce the timings in the light of the prevailing lockdown amid the Coronavirus outbreak and RBI's direction to reduce debt market timings for the same reason. 

According to MF advisors, the move will make it difficult for equity scheme investors to time their fresh allocations or redemptions in an efficient manner. “Advancing cut-off times by two hours for equity schemes will be slightly inconvenient. But this is a temporary move in light of the 21-day lockdown. Digital channels will help investors to take faster investment decisions,” said Amol Joshi, founder of Plan Rupee Investment Services.

Equity markets close at 3.30pm, which made cut-off time at 3pm more convenient for equity scheme investors.

The cut-off times for redemptions have also been revised to 1pm for all the schemes.

The market regulator informed MF industry that decision to revise the timings was being taken after Reserve Bank of India (RBI) changed the debt market timings, as well as in light of MF industry’s request on reducing the timing.

Sources say MF industry had last week written to Sebi to revise the cut-off times as the ongoing lockdown had made it difficult for staff-members to travel to offices. Further, banks were also functioning for limited hours, upto 2pm.  

“Mutual funds and its service providers are compelled to work with bare minimum staff in office with majority of the staff operating from home over prolonged period of time. In view of the complete lock-down, non-availability of transport facilities and restrictions on movement, it is becoming difficult for even critical staff to reach office” the industry had represented to Sebi.

On Saturday, RBI had reduced timing for debt markets to three hours. i.e. from 11am to 2pm.