SEBI has proposed sweeping changes to gold and silver ETF pricing rules to curb mispricing and align trading values with real asset prices. The move introduces dynamic price bands, cooling-off periods, and a pre-open session to improve transparency and investor protection.
SEBI Proposes New Gold and Silver ETF Pricing Rules
New Delhi: Important news for investors investing in gold and silver. Market regulator SEBI has proposed changes to the regulations for gold and silver ETFs (exchange-traded funds) to reduce the gap between the trading price and the value of the underlying metal. Gold and silver prices have recently experienced sharp fluctuations in both domestic and international markets, impacting the pricing of ETFs.
Gold and silver trade globally almost daily, while their ETFs are bought and sold only during fixed hours in the Indian market. Consequently, ETF prices often deviate significantly from the underlying asset value. To address this issue, a seven-page consultation paper was released on February 14, 2026, suggesting the implementation of dynamic price bands.
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The current system limits the fixed price band of ETFs to ±20% of the T-2 day NAV, which is considered insufficient to handle rising volatility. Under the new proposal, a dynamic price band will be determined based on the previous day's indicative NAV. This will initially be ±6% and could be increased in stages, if necessary, to a maximum of ±20%. Each stage includes a 3% flex and a 15-minute cooling-off period.
Flex will only be permitted twice per trading day, requiring a minimum of 50 trades, 10 separate client codes, and the participation of three trading members. It is also proposed to introduce a separate pre-open session for gold and silver ETFs to better align with global prices.
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Experts believe that the implementation of the new rules will make ETF trading more accurate, secure, and transparent. Reducing mispricing will allow investors to trade closer to the actual market price. Furthermore, this move could help increase market confidence and further strengthen digital investment in gold and silver. Overall, this initiative is considered an important step towards protecting investor interests.
