Gold & Silver ETFs Set for Major Valuation Change from April 2026; SEBI’s New Rule Explained

Synopsis: From April 1, 2026, Securities and Exchange Board of India will require gold and silver ETFs to use domestic exchange spot prices instead of LBMA benchmarks, aiming to improve valuation transparency, consistency, and alignment with Indian market conditions.

Gold and Silver ETFs are set to witness regulatory changes from April 2026, following a fresh directive from the Securities and Exchange Board of India (SEBI). The proposed framework has sparked discussions among investors, fund houses, and market participants, as it could reshape operational structures, investment norms, and overall dynamics within the precious metals ETF segment.

What Has Changed?

India’s market regulator, Securities and Exchange Board of India (SEBI), has revised the method used to value gold and silver held by ETFs and mutual fund schemes. Starting April 1, 2026, fund houses will be required to use domestically published spot prices from recognised Indian exchanges instead of relying on international benchmarks. The objective is to improve transparency, ensure uniformity across schemes, and align ETF valuations more closely with Indian market conditions.

How Gold & Silver ETFs Were Valued Earlier

Earlier, ETFs used benchmark prices published by the London Bullion Market Association (LBMA). These global prices were converted into Indian rupee terms after adjusting for currency exchange rates, customs duties, transportation costs, taxes, and notional premiums or discounts. Since multiple adjustments were involved, the final valuation could vary slightly across different fund houses, sometimes leading to inconsistencies in NAV calculations.

What Is the New Valuation Method?

Under the new framework, mutual funds must use pooled spot prices published by recognised Indian stock exchanges such as the Multi Commodity Exchange of India (MCX). These prices are derived from actual domestic market trades and physically settled contracts, making them more reflective of Indian supply-demand dynamics. SEBI believes this will reduce pricing differences and bring greater consistency to NAV calculations across gold and silver ETFs.

The revised norms will come into effect from April 1, 2026, under the updated regulatory framework. Additionally, AMFI, in consultation with SEBI, will establish a uniform policy to ensure all asset management companies adopt the same valuation methodology, reinforcing consistency across the industry.

Why SEBI Made This Move

SEBI introduced this change to enhance transparency, standardisation, and regulatory clarity in bullion-backed mutual fund schemes. By shifting from international reference prices to domestic exchange-based prices, valuations are expected to better reflect prevailing Indian market conditions. This step also strengthens regulatory oversight, as exchange-published prices operate within a monitored and structured framework.

What This Means for Investors

For investors, the quantity of gold or silver held by an ETF remains unchanged, and the structure of the product does not alter. The only change is in how the daily valuation is calculated. Over time, this could reduce NAV discrepancies between similar schemes, improve comparability across fund houses, and increase overall confidence in bullion ETFs.

While gold and silver ETFs themselves remain structurally unchanged, their pricing benchmark will shift from international to domestic sources starting April 2026. This technical yet significant reform is aimed at making valuations more accurate, standardised, and aligned with Indian market realities.

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