Sebi approves net settlement of cash market trades for mutual funds

India's markets regulator on Thursday allowed mutual fund schemes to ‌settle cash market trades on a net basis, helping reduce funding requirements and improve market efficiency.

The move extends to mutual funds ​a facility that the Securities ​and Exchange Board of India (SEBI) had already permitted for foreign portfolio investors earlier this ​year.

Here are the key details:

SEBI said the ​transactions ⁠eligible for net settlement have to be either a sale ⁠or ​purchase in a ​security, not both

Net settlement, also called netting, would not be allowed across different schemes of the same fund

The regulator said that netting will be allowed in mutual fund schemes from April 1, 2027