New gold ETF pricing plan splits industry

Sebi seeks to replace the long-used London Bullion Market Association benchmark with domestic prices

- Neha Joshi & Dipti Sharma

India's markets regulator is preparing a sweeping change in how gold and silver exchange-traded funds (ETFs) are valued, a move that could alter pricing norms for a fast-growing segment of the country's mutual fund industry.

The Securities and Exchange Board of India (Sebi) has proposed replacing the long-used London Bullion Market Association benchmark with domestic spot prices, aiming to simplify fund valuation and better align it with local market dynamics.

The proposal, laid out in a 16 July consultation paper, has drawn cautious support and skepticism from the industry.

Assets under management in Indian gold ETFs stood at ₹64,777 crore ($7.5 billion) as of June, up 89% from a year earlier, according to data from the Association of Mutual Funds in India (Amfi). Net inflows jumped 613% in June from May, reaching ₹2,081 crore—the highest in five months.

At the heart of the overhaul is an attempt to standardize how net asset values (NAVs) are calculated by fund houses.