SEBI Revises Gold and Silver Valuation Norms for Mutual Funds

Circular no. HO/(68)2026-IMD-POD-2/I/5780/2026; Dated: 26.02.2026

The Securities and Exchange Board of India (SEBI) has revised the valuation framework for physical gold and silver held by mutual fund schemes, including Gold and Silver Exchange Traded Funds (ETFs). The change follows deliberations in the Mutual Fund Advisory Committee (MFAC), public consultation, and discussions with stakeholders.

1. Existing Valuation Methodology

Under the existing regulatory framework, physical gold and silver held by Gold and Silver ETFs are valued based on the AM fixing prices of the London Bullion Market Association (LBMA).

The final domestic valuation is determined after making adjustments for:

• Metric and currency conversions
• Transportation costs
• Customs duties
• Applicable taxes and levies
• Notional premium or discount to reflect domestic market conditions

2. Revised Valuation Approach

SEBI has now decided that mutual funds must value physical gold and silver using polled spot prices published by recognised stock exchanges instead of the LBMA benchmark.

This shift is intended to align valuation practices more closely with domestic market prices and enhance transparency in valuation.

3. Compliance with Spot Polling Guidelines

The spot polling mechanism adopted by recognised stock exchanges must comply with SEBI’s prescribed spot polling guidelines, as updated from time to time.

Mutual funds are required to ensure that valuations are based on such compliant and recognised spot price polling systems.

4. Effective Date

The revised valuation framework will come into effect from 1 April 2026.

From this date onwards, all mutual fund schemes holding physical gold and silver must adopt the new valuation methodology based on polled spot prices of recognised stock exchanges.

5. Objective of the Revision

The revised framework seeks to:

• Align valuations with domestic market dynamics
• Enhance transparency and accuracy in valuation of precious metals
• Strengthen investor confidence through market-linked pricing
• Ensure uniformity across mutual fund schemes holding gold and silver

Mutual funds will need to update their valuation policies and systems to ensure compliance with the revised SEBI guidelines within the prescribed timeline.

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