SEBI considers net settlement for mutual funds after fund feedback
SEBI is considering letting mutual funds use a net settlement system, which basically means settling only the final amount owed instead of every single trade.
This method, already used by foreign investors since April 2026, could make cash flow smoother for mutual funds and help them rely less on short-term borrowing.
The idea is still under review after SEBI got feedback from fund houses.
Funds back net settlement, banks cautious
Some mutual funds have expressed support for the idea, arguing that net settlement will make managing their money simpler and reduce the need to borrow just to handle daily transactions.
SEBI recently allowed more flexibility with intraday borrowing too.
But not everyone is convinced: banks and custodians worry about risks if borrowed money is not fully backed by guaranteed assets.
Still, SEBI says the plan helps fix timing issues without putting investor returns at risk.