SEBI introduces a revised trading framework for exchange-traded funds (ETFs), effective from September. Under the new rules, fixed price bands are replaced with dynamic, asset-linked price bands that move with changes in underlying markets. The regulator also revises how ETFs’ base prices are calculated. Together, these adjustments are intended to improve price discovery, so ETF trading better reflects movements in the underlying assets. The update applies across multiple ETF categories, including equity, debt and commodity ETFs, and is designed to enhance trading efficiency. Sources describe the shift as a change in both the price-band mechanism and the calculation methodology, moving away from static limits toward bands that are meant to respond more directly to market conditions. The stated objective is to align ETF pricing more closely with the value of the underlying holdings while supporting smoother trading.
SEBI introduces dynamic price bands and new base price rules for ETFs
SEBI introduces a revised trading framework for exchange-traded funds (ETFs), effective from September. Under the new rules, fixed price bands are replaced with dynamic, asset-linked price bands that...
- SEBI revamps ETF trading rules with changes to price bands and base price calculation.
- Fixed price bands are replaced with dynamic, asset-linked price bands.
- The framework is scheduled to be implemented from September.
- The revised rules aim to improve price discovery and better reflect underlying asset movements.
- The changes apply to equity, debt and commodity ETFs.
New framework replaces fixed limits with asset-linked bands, changes base price calculation to improve price discovery
13 hours agoSebi has introduced a new framework for ETFs, replacing fixed price bands with dynamic limits and revising base price calculations. The changes aim to improve price discovery, better reflect underlying asset movements and enhance trading efficiency across equity, debt and commodity ETFs.
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