Summary of this article
Sebi shifts gold, silver valuation method.
Domestic spot prices replace LBMA benchmark.
New rules effective April 1, 2026.
On February 26, 2026, the Securities and Exchange Board of India (Sebi) issued a circular introducing a revised framework related to gold and silver. The said framework is said to set the valuation of physical gold and silver held by the mutual fund schemes. This move is aimed at improving transparency, uniformity and aligning asset pricing closely with the domestic market conditions.
Until now, physical gold and silver valuation was held by Gold and Silver Exchange Traded Funds (ETFs) and were valued by using the AM fixing prices as published by the London Bullion Market Association (LBMA). These international benchmarks were then adjusted for metric and currency conversions, customs duties, applicable taxes, levies, and any notional premium to reflect the domestic valuations. While this method provided a globally recognised reference point, it requires multiple adjustments to make sure the prices are relevant for the Indian markets.
Following reflections in the Mutual Fund Advisory Committee (MFAC), public consultations, and discussions with stakeholders, Sebi has decided to adopt a system that is domestically anchored in its valuation approach. Under the revised framework, mutual funds will be the valuation point of physical gold and silver using polled spot prices as recognised by the Indian stock exchanges. These prices are to be used for the settlement of physically delivered gold and silver to ensure uniformity.
Sebi has formalised this regularity shift under the newly notified SEBI (Mutual Funds) Regulations, 2026, which is issued effective from April 01, 2026. The notification for the same came dated January 14, 2026. In accordance with Regulations 22(9) and 63(9), and subject to the norms of investment valuations as specified in the seventh schedule of the 2026 regulations. Mutual funds are to adopt the stock exchange published prices for valuing physical gold and silver holdings.
Issued by the powers granted by Section 11(1) of the Securities and Exchange Board of India Act and Regulation 77 of the Sebi (mutual funds) regulations, 1996, the notice highlights Sebi’s agreement to protect the interests of the investors, while promoting market development.
In conclusion, the transition is expected to mark a significant step towards improving valuation transparency and improving investor confidence in gold and silver mutual fund schemes.
