**Executive Summary**
This circular, issued by the Securities and Exchange Board of India (SEBI) on February 26, 2026, outlines changes to the valuation of physical gold and silver held by mutual fund schemes. Effective April 1, 2026, mutual funds must use polled spot prices published by recognized stock exchanges for valuation purposes, replacing the previous method based on London Bullion Market Association (LBMA) prices. The Association of Mutual Funds in India (AMFI), in consultation with SEBI, is required to prescribe a uniform policy in this regard.
**Key Points / Main Content**
* **Change in Valuation Method:**
* Effective April 1, 2026, physical gold and silver held by mutual funds must be valued using polled spot prices published by recognized stock exchanges.
* This replaces the previous method of using AM fixing prices of London Bullion Market Association (LBMA) prices.
* **Rationale for Change:**
* The use of spot prices from recognized stock exchanges is intended to provide greater transparency and compliance.
* This also aims to ensure valuation reflective of domestic market conditions and uniformity in valuation practices.
* **Regulatory Basis:**
* This change is based on SEBI (Mutual Funds) Regulations, 2026, notified vide notification no. LAD-NRO/GN/2026/294 dated January 14, 2026.
* The requirement is specified under Regulation 22(9) and Regulation 63(9) and subject to the investment valuation norms specified in Seventh Schedule of SEBI (Mutual Funds) Regulations, 2026.
* The polled spot prices must be from recognized stock exchanges used for settlement of physically delivered gold and silver derivatives contracts.
* The spot polling mechanism shall comply with the spot polling guidelines specified by SEBI from time to time.
* **Policy Formulation:**
* AMFI, in consultation with SEBI, is required to prescribe a uniform policy regarding the valuation of gold and silver.
* **Legal Basis:**
* This circular is issued under the powers conferred by Section 11 (1) of the Securities and Exchange read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996.
**Impact Analysis**
**All Mutual Funds/Asset Management Companies (AMCs)/Trustee Companies/Board of Trustees of Mutual Funds**
* **Impact:** Must transition to using polled spot prices from recognized stock exchanges for valuing physical gold and silver holdings.
* **Action Required:** Update valuation procedures and systems to comply with the new requirements by April 1, 2026.
**Association of Mutual Funds in India (AMFI)**
* **Impact:** Responsible for establishing a uniform policy in consultation with SEBI regarding the valuation of gold and silver.
* **Action Required:** Collaborate with SEBI to develop and prescribe the uniform policy.
**Investors**
* **Impact:** Aims to protect the interest of investors and promote the development of, and to regulate the securities market.
* **Action Required:** No direct action is required. Should stay informed about changes and their potential impact on fund performance.
Key Entities Referenced
SEBI (Mutual Funds) Regulations, 2026: Regulations issued by SEBI governing the valuation of physical gold and silver held by mutual fund schemes.
Securities and Exchange Board of India (SEBI): The primary regulator issuing this circular regarding the valuation of physical gold and silver.
Mutual Funds: The entities directly affected by the circular, required to value physical gold and silver according to the new guidelines.
London Bullion Market Association (LBMA): The previous benchmark used for valuation before the new regulation.
Mutual Fund Advisory Committee (MFAC): Committee involved in the discussions leading to the new valuation policy.
CIRCULAR
HO/(68)2026-IMD-POD-2/I/5780/2026 February 26, 2026
All Mutual Funds/
All Asset Management Companies (AMCs)/
All Trustee Companies/ Board of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)/
Sir / Madam,
Subject: Valuation of physical Gold and Silver held by mutual fund schemes
1. As per the extant regulatory framework, physical Gold and Silver held by Gold and
Silver Exchange Traded Funds (ETFs) is valued at AM fixing prices of London
Bullion Market Association (LBMA). The final valuation is arrived at after
adjusting the LBMA prices with necessary metric and currency conversions,
addition of transportation costs, customs duty, applicable taxes and levies and
factoring notional premium or discount to arrive at domestic valuations.
2. Pursuant to the discussions in Mutual Fund Advisory Committee (MFAC), public
consultation and discussion with all stakeholders, it was deliberated that polled
spot prices published by recognized stock exchanges may be used for valuation of
Gold and Silver held by mutual fund schemes. As stock exchanges are subject to
transparency and compliance requirements under the regulatory framework,
using the spot price published by such regulated entities shall lead to valuation
reflective of domestic market conditions and also ensure uniformity in the
valuation practices.
3. SEBI has notified SEBI (Mutual Funds) Regulations, 2026 vide notification no.
LAD-NRO/GN/2026/294 dated January 14, 2026 to come into force from April 01,
2026. Accordingly, it has been decided that with effect from April 01, 2026, in
terms of Regulation 22(9) and Regulation 63(9) and subject to the investment
valuation norms specified in Seventh Schedule of SEBI (Mutual Funds)
Regulations, 2026, the mutual funds shall value physical Gold and Silver by using
the polled spot prices published by the recognized stock exchanges which are
used for settlement of physically delivered Gold and Silver derivatives contracts.
Page 1 of 2The spot polling mechanism shall comply with the spot polling guidelines as
specified by SEBI from time to time.
4. AMFI in consultation with SEBI shall prescribe a uniform policy in this regard.
5. This circular is issued in exercise of powers conferred under Section 11 (1) of the
Securities and Exchange read with the provisions of Regulation 77 of SEBI
(Mutual Funds) Regulations, 1996, to protect the interest of investors in securities
and to promote the development of, and to regulate the securities market.
6. This Circular is available at www.sebi.gov.in under the link “Legal > Circulars”.
Yours sincerely,
Priyanka Mahapatra
General Manager
Investment Management Department
Email: priyankam@sebi.gov.in
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