SEBI seeks comments on a proposal for net fund obligations in mutual fund cash-market trades while retaining gross securities settlement. This change aims to streamline the cash market transactions.
Overview of the Proposal
On September 4, 2026, the Securities and Exchange Board of India (SEBI) proposed to allow mutual funds to net their fund obligations related to outright cash-market trades. This move aims to enhance operational efficiency without altering the existing framework that mandates gross securities settlement.
Details of the Proposal
By allowing net settlement, SEBI seeks to minimize liquidity pressures on mutual funds during trading, making the cash market more efficient. This is part of ongoing efforts to adapt regulations within the securities market to better align with current trading practices while preserving robust settlement frameworks.
Implications for the Market
For practitioners, this proposal is significant as it not only changes operational workflows for mutual fund trades but also invites engagement from industry stakeholders. Legal advisors and compliance officers should monitor the feedback period closely to understand potential regulatory developments that may emerge from this consultation process.
Citations
- SEBI Proposal (2026) SEBI Circular
