SEBI has proposed extending the cut-off time for redemption of liquid and overnight funds from 3 pm to 7 pm. The move comes after a recommendation from a working group including AMFI and members of the Mutual Funds Advisory Committee.
The change in cut-off timings is specifically aimed at overnight fund schemes, allowing stock brokers and clearing members more time to un-pledge units and place redemption requests with mutual funds after market hours. This will give them more flexibility in managing their investments, as they receive money invested in securities with one day maturity on the next working day.
It is important to note that the timeline of redemption, whether at 3 pm or 7 pm, will not impact the funds’ valuation or their ability to redeem investments. The proposal is currently open for public comments until February 10.
Overall, the proposal aims to provide more flexibility and convenience for investors in managing their investments, particularly in overnight fund schemes.
