Coronavirus: Sebi revises cut-off timings for MF subscription, redemption

Markets regulator Sebi has revised cut-off timings for subscription and redemption of liquid, overnight and other mutual fund schemes amid the nationwide lockdown to deal with the coronavirus pandemic.

The revised timings will be applicable from April 7 till April 17, according to a communication from the Association of Mutual Funds in India (AMFI).

The move comes after the Reserve Bank of India (RBI) changed the debt market timings amid the ongoing nationwide lockdown.

In case of subscription of liquid and overnight schemes, the regulator has revised the timing to 12:30 pm, while the same for other schemes is 1 pm.

With respect to redemption of liquid, overnight and other mutual funds, Sebi has revised the timing to 1 pm.

Earlier, the cut-off time for liquid and overnight funds was 1:30 pm, while the same for other funds was 3 pm.

Taking into account the impact of the revised trading hours for various markets...Sebi has decided to reduce the cut-off timing for both subscription and redemption in various mutual fund schemes for a temporary period, the communication said.

In a separate statement, BSE has also announced the revised timings for subscription and redemption of liquid, overnight and other schemes on its mutual fund distribution platform, StAR MF.

This will impact the funds flow as there will be lesser time to make investments, said Omkeshwar Singh, head of mutual fund distribution business at Samco.

He further said equity markets close at 3.30pm, which made cut-off time at 3 pm convenient for investors of equity schemes.

Many make investments based upon how the European markets have opened, with revised timings, investors will not have the information available, he added.

Several fund houses also informed investors about the change in NAV (net asset value) cut-off timings for MF transactions including liquid funds and overnight funds.

Liquid funds invest in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon and overnight funds invest in securities with maturity of one day.

The offices of the asset management companies and Registrar & Transfer Agents (RTA) are closed due to the lockdown.

Industry body Amfi advised investors to transact through various online modes such as mobile applications and websites, among others.