Sebi shifts gold and silver valuation for MFs to domestic spot prices

Sebi has overhauled valuation norms for mutual funds, requiring gold and silver holdings to be priced using domestic spot rates from recognised exchanges instead of LBMA-linked benchmarks

The Securities and Exchange Board of India (Sebi) has revised the valuation framework for physical gold and silver held by mutual fund (MF) schemes, directing funds to use polled spot prices published by recognised stock exchanges instead of international benchmarks.

 

Under the new rules, effective April 1, 2026, MFs will value physical gold and silver using spot prices that are used for settlement of physically delivered gold and silver derivative contracts on domestic exchanges. The move marks a shift away from the current practice of using AM fixing prices of the London Bullion Market Association (LBMA), adjusted for currency conversion, transportation costs, customs duties, taxes, and notional premiums or discounts.

 

 

Sebi said the change follows deliberations in the MF Advisory Committee, a public consultation process and discussions with market participants. The regulator noted that prices published by recognised stock exchanges are subject to transparency and compliance norms, and are therefore more reflective of domestic market conditions.

 

“Using spot prices from regulated exchanges will lead to greater uniformity in valuation practices and ensure that asset values better mirror Indian market dynamics,” the circular said.

 

Sebi has also asked the Association of Mutual Funds in India (Amfi), in consultation with the regulator, to prescribe a uniform policy for implementation across the industry.