SEBI is seeking comments on a proposal to allow mutual funds to net fund obligations for cash market trades while maintaining gross securities settlement.
SEBI Proposes Net Settlement for Mutual Fund Cash Market Transactions
On September 10, 2026, SEBI put forth a proposal to facilitate net settlement for mutual funds concerning their cash market transactions. This initiative aims to streamline the process while continuing to require gross securities settlement.
The proposed net settlement mechanism is expected to enhance liquidity management for mutual funds and reduce operational complexities. By netting fund obligations, funds can execute transactions more efficiently, which may ultimately benefit market participants.
Legal advisors to mutual funds should evaluate the implications of this proposal, particularly regarding compliance, operational adjustments, and potential effects on market liquidity.
