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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

NDSL reiterates SEBI Circular regarding Framework for net settlement of funds for transactions undertaken by mutual fund schemes in cash market

09-Nov-2026 | NSDL/POLICY/2026/0182

NDSL has reiterated the SEBI Circular regarding Framework for net settlement of funds for transactions undertaken by mutual fund schemes in cash market. Through this circular, Participants are required to refer the SEBI circular and ensure compliance. SEBI has permitted mutual fund schemes to follow net settlement of funds for outright purchase and sale transactions undertaken in the cash market, with effect from April 1, 2027. Under this framework, fund obligations can be adjusted within the same mutual fund scheme and settlement cycle, reducing the temporary funding requirement. However, transactions involving both purchase and sale of the same security during the same settlement cycle will not qualify for net settlement. Further, netting between different schemes or portfolios of the same mutual fund will not be permitted. The settlement of securities will continue on a gross basis, and applicable Securities Transaction Tax (STT) and stamp duty will remain unchanged. Any remaining purchase obligation after netting must be funded separately by the concerned scheme, while non-outright transactions will continue to be settled on a gross basis. AMCs and custodians must establish adequate systems, maintain proper records and ensure that there is no inter-scheme fund adjustment. AMFI, in consultation with stock exchanges, clearing corporations and custodians, will formulate implementation standards. Trustees must also review the implementation to ensure that it is in the interest of unit-holders. For more information, please refer the attached pdf

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Corporate Laws

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Corporate Laws

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