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

Valuation of repurchase (repo) transactions by Mutual Funds

26-Nov-2024 | SEBI/HO/IMD/IMD-I PoD-1/P/CIR/2024/163

SEBI has issued a circular regarding Valuation of repurchase (repo) transactions by Mutual Funds, effective from 1st January 2025. By virtue of this circular, following amendments have been notified- 1. The valuation of investments made in repurchase (repo) transactions (including tri-party repo i.e. TREPS) with tenor of up to 30 days have been excluded from the purview of Para 9.6.2 of the Master Circular for Mutual Funds. The amended Para 9.6.2 now reads as "Investments in short-term deposits with banks (pending deployment) shall be valued on cost plus accrual basis". 2. The limitation regarding the valuation of money market and debt securities with residual maturity of over 30 days is removed from Para 9.2.3(b)(1) of the Master Circular. Further, the valuation of new securities in the absence of security level prices may now be done by two methods, in terms of Para 9.2.3(b)(2). Such securities may either be valued at the purchase yield or at the purchase price. The amended Para 9.2.3 of the Master Circular now reads as- "Valuation of money market and debt securities: 1. All money market and debt securities including floating rate securities shall be valued at average of security level prices obtained from valuation agencies. 2. In case security level prices given by valuation agencies are not available for a new security (which is currently not held by any Mutual Fund), then such security may be valued at purchase yield/price on the date of allotment / purchase."

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