SEBI Drops LBMA Benchmark, Mandates Exchange Spot Prices For Gold And Silver Fund Valuation

The Securities and Exchange Board of India (SEBI) on Thursday issued a circular revising the valuation norms for physical gold and silver held by mutual fund schemes.

Under the existing regulatory framework, physical gold and silver held by Gold and Silver Exchange Traded Funds are valued at the AM fixing prices of the London Bullion Market Association. The final valuation is arrived at after adjusting the LBMA prices for necessary metric and currency conversions, transportation costs, customs duty, applicable taxes and levies, and factoring in notional premium or discount to arrive at domestic valuations.

With effect from April 01, 2026, mutual funds shall value physical gold and silver by using the polled spot prices published by the recognised stock exchanges, which are used for settlement of physically delivered gold and silver derivatives contracts.

The circular notes that stock exchanges are subject to transparency and compliance requirements under the regulatory framework. It states that 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.

The spot polling mechanism shall comply with the spot polling guidelines as specified by SEBI from time to time.

AMFI, in consultation with SEBI, shall prescribe a uniform policy in this regard.