SEBI lays down rules for mutual funds to manage silver ETFs

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After Gold ETFs, Silver ETFs will give one more option to mutual fund investors wanting to invest in commodities.

Moneycontrol PF Team

November 11, 2021 / 07:02 PM IST

SEBI had taken decision to allow silver-backed ETFs in its last board meeting

The Securities and Exchange Board of India (SEBI) has laid down the regulations for mutual funds for managing silver ETFs.

Just like Gold ETFs, SEBI also wants mutual funds to arrive at the value of silver as per the London Bullion Market Association (LBMA).

SEBI has stated that the silver held by a silver exchange traded fund (ETF) should be valued at the “AM fixing price of London Bullion Market Association in US dollars per troy ounce for silver having a fineness of 999.0 parts per thousand”.

The value of silver will have to be converted into Indian metrics and currency.

Further, transportation and other charges that may be normally incurred in bringing such silver from London to the place where it is actually stored for the mutual funds, has to be added to the pricing.

Custom duties, taxes and other levies that may be applicable all have to factored in.

“Silver ETFs will provide an additional option to investors to invest in commodity as an asset class. Additionally, it will help investors to diversify their portfolio as part of their asset allocation, due to low correlation with other asset classes,” said Hemen Bhatia, deputy head – ETF, Nippon Life India Asset Mutual Fund.

Silver ETFs will have to keep the silver assets with SEBI-registered custodians.

Moneycontrol PF Team

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