The directive of the Securities and Exchange Board of India (SEBI) that is proof of purchase of units of mutual fund schemes (except liquid and overnight systems), the closing NAV of the day shall be suitable on which the funds are available for utilization irrespective of the size and time of receipt of such request – has made the small investors a concerned order.
This is because the criteria of applying NAV on the day on which the funds are ready for utilization is currently relevant on investments of Rs 2 lakh or more, while fewer investors investing lesser amount get the same day NAV on the date of application, performed the applications are submitted before the cutoff time.
The cutoff time for marketing and improvement of equity and debt funds (except liquid funds) is 3 pm, while the cutoff time for the purchase of liquid funds is 2 pm.
On applying within the cutoff period for purchasing of units of MF schemes for less than Rs 2 lakh, an investor gets the pieces attached at the NAV of the date of application, while the investors purchasing Rs 2 lakh or more gets the NAV of the date on which the salary is realized.
To bring parity among both small (investing less than Rs 2 lakh) and big investors (investing Rs 2 lakh or more), market control head SEBI had earlier directed that from January 1, 2021, units will be distributed to all investors, irrespective of the size of the investment, only after the realization of funds or at the NAV of the day on which funds match possible for utilization.
However, giving support to small investors for some more time, the market regulator has suspended the implementation of NAV applicability for Mutual Fund purchases by one month to February 1, 2021.
So, till February 1, 2021, small investors, investing more cramped than Rs 2 lakh, may take precedence of availing the same-day NAV by obeying application forms before the cutoff time on a day of market decline.