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Those investing money in gold and silver, pay attention! The biggest rule is going to change from September 1, new order of SEBI issued

New Delhi: If you also invest money in gold or silver and like to invest through Exchange Traded Fund i.e. ETF, then this news is very important for you. Market regulator SEBI has announced a major and historic change in the trading rules of commodity ETFs. A new facility of ‘Pre Open Call Option’ and ‘Dynamic Price Band’ is going to start for Gold and Silver ETFs from 1st September. Through these new steps taken by SEBI, ETFs in the Indian market will now be completely connected with the global market i.e. the international market. Let us try to understand in simple language in this news what rules SEBI has changed in the game of gold and silver and what effect it will have on your pocket.

After all, what is this new fund of dynamic price bands? Talking about the new rules of SEBI, now the initial price band for gold and silver ETFs will be fixed at ±6%. This simply means that when the market opens in the morning, the prices of gold and silver will trade within this fixed range only. But suppose that if there is a sudden big reversal or huge fluctuation in the prices of gold and silver in the global market, then after a short cooling off period (period of stagnation), this band will be increased by 3-3%. The most interesting thing is that now this band can be increased any number of times in a day, the government has not set any upper limit for it.

Why did SEBI suddenly have to bring these new rules in the market? Now the question arises that why did SEBI need this change? If we talk about the current system, then two days old Net Asset Value (NAV) is used to fix the base price of ETF in the market. Is considered the basis. In such a situation, whenever there is a sudden big change in the prices of gold and silver in the international market, the next morning the prices of ETFs in the Indian market become very different and mismatched with the actual asset value.

Common investors have to bear the direct loss due to this. Sometimes they have to buy expensive ETFs by paying very high premiums, and sometimes they have to sell them at huge discounts. Now, after the new rules come into effect from September 1, this old problem of investors will go away forever to a great extent. Now how will the base price of ETF be decided? SEBI has now completely changed the formula for determining the base price. According to the new rule, now the Volume Weighted Average Price (VWAP) of the last 30 minutes of the previous trading session will be considered to set the base price of the ETF.

If, for some reason, there is no trading in the market in the last 30 minutes, then the last traded price (LTP) of that day will be considered as the base price. At the same time, if there is no trading in the market that entire day, then the work will be started considering the latest NAV available at that time as the base price. What will be the direct benefit to common investors from this big change? Now let's talk about the most important issue that how will this affect your profits. With this big decision of SEBI, common investors will now get a golden opportunity to trade with absolutely accurate and live international prices.

Along with this, no matter how big the market falls or there is a huge rise, there will be no danger of trading stopping due to the facility of dynamic bands. With this, investors will be able to easily buy and sell ETFs at the right and real price even in any adverse situation, Due to which they will be saved from any loss.