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SEBI Revises ETF Trading Framework to Address NAV Pricing Inefficiencies
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Supreme Court of Indiacorporatefinancial

SEBI Revises ETF Trading Framework to Address NAV Pricing Inefficiencies

July 1, 2026

SEBI has updated the ETF trading framework to improve price discovery and address inefficiencies arising from T-2 NAV-based pricing.

Enhancements to ETF Trading Framework by SEBI

The Securities and Exchange Board of India (SEBI) has introduced new norms aimed at revising the trading framework for Exchange-Traded Funds (ETFs). These changes specifically address inefficiencies related to the T-2 NAV-based pricing model that has been observed in recent trading activities.

The revised framework includes adjustments to base prices, price bands, and close-out procedures, which are expected to enhance price discovery and align ETF trading more closely with the movements of the underlying assets. This is a significant step towards improving market functionality and investor confidence in ETFs.

Legal and financial professionals should stay informed about these regulatory changes as they may impact trading strategies and compliance measures for fund managers operating in the ETF space.

Citations

  • SEBI (2026) SEBI Notification 2233
Source:Supreme Court of India
Practice Areas:corporatefinancial

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