Sebi approves net settlement for mutual fund cash market trades
In short
SEBI has approved net settlement for mutual fund schemes in cash market trades, starting April 1, 2027. The rule will apply only to sales or purchases of the same security, and cross-scheme netting will still not be allowed.
The change is meant to make funding easier and improve market efficiency. Until now, net settlement was only available to foreign portfolio investors.
What the reporting says
SEBI has approved net settlement for mutual fund scheme cash market trades, with the change set to take effect on April 1, 2027. The move is meant to streamline funding requirements and improve market efficiency, while cross-scheme netting will remain banned. The facility was previously available only to foreign portfolio investors.
Why it matters
SEBI’s decision will let mutual fund schemes use net settlement for eligible cash market trades from April 1, 2027. The move is aimed at reducing funding needs and improving efficiency, while keeping cross-scheme netting off-limits. It extends a facility that had been limited to foreign portfolio investors and could affect mutual fund operations and market settlement workflows.