SEBI ETF Reform Proposals: T-1 Base Price
Why in the news
SEBI floated a consultation paper on Exchange Traded Funds to sharpen price discovery and handle volatility.
About ETFs
- Listed funds traded like shares, following an index, commodity or asset basket; valued on Net Asset Value (NAV).
Proposed changes
| Area | Now | Proposal |
|---|---|---|
| Base price | T-2 NAV | T-1 data: closing price, average iNAV of last 30 minutes, or closing NAV |
| Price bands | ±20% (overnight ETFs ±5%) | Reduce or rationalise to match volatility |
| Gold and silver ETFs | 20% band | Consider removal; separate pre-open session |
Why gold and silver
- Global commodity prices move round the clock; Indian ETFs trade only in domestic hours.
Exam angle
- Reference day change: T-2 to T-1.