Sebi Closing-Price Auction Causes ETF Pricing Mismatches
· Business · LiveMint, Bloomberg
The Securities and Exchange Board of India's new closing-auction system for 213 derivative-traded stocks is creating valuation challenges for exchange-traded funds. Because these stocks stop continuous trading at 3:15 p.m. while others trade until 3:30 p.m., ETFs holding a mix of both assets face discrepancies in their indicative net asset value. This lag in accurate pricing can discourage investors from trading ETFs during the final 15 minutes of the market session. Mutual fund executives have noted that the issue persists until all stocks are integrated into the auction mechanism. Despite these challenges, the ETF sector in India has grown significantly, reaching assets worth ₹11.71 trillion as of July 2026.
Why it matters
The pricing mismatch affects the transparency and accuracy of ETF valuations, potentially impacting investor confidence and trading activity during the market close.
Read the original report — LiveMint
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