The Securities and Exchange Board of India (SEBI) has notified the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2021 which seeks to amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996.
As per the amendment the term “mutual fund” means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities, money market instruments, gold or gold-related instruments, silver or silver related instruments, real estate assets and such other assets and instruments as may be specified by the Board from time to time. Provided that infrastructure debt fund schemes may raise monies through private placement of units, subject to conditions specified in these regulations. Provided further that mutual fund schemes investing in exchange-traded commodity derivatives may hold the underlying goods in case of physical settlement of such contracts.
Money collected under any silver exchange-traded fund scheme shall be invested only in silver or silver-related instruments, in accordance with sub-regulation (6) of regulation 44, the notification said.
The silver held by a silver exchange-traded fund scheme shall be valued at the AM fixing price of London Bullion Market Association (LBMA) in US dollars per troy ounce for silver having a fineness of 999.0 parts per thousand, subject to adjustment for conversion to metric measurements as per standard conversion rates, adjustment for conversion of US dollars into Indian rupees as per the RBI reference rate declared by the Foreign Exchange Dealers Association of India (FEDAI). Additionally, transportation and other charges that may be normally incurred in bringing such silver from London to the place where it is actually stored on behalf of the mutual fund; and notional customs duty and other applicable taxes and levies that may be normally incurred to bring the silver from London to the place where it is actually stored on behalf of the mutual fund. Provided that the adjustment under clause (c) above may be made on the basis of a notional premium that is usually charged for the delivery of silver to the place where it is stored on behalf of the mutual fund. Provided further that where the silver held by a silver exchange-traded fund scheme has a greater fineness, the relevant LBMA prices of AM fixing shall be taken as the reference price under this sub-paragraph.
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