Description

BSE revises reference price methodology for Gold and Silver ETFs to use T-1 NAV due to volatility in underlying commodity prices, with ±20% price band applicable.

Summary

BSE has revised the reference price methodology for Gold and Silver ETFs traded on the exchange. Due to volatility in underlying Gold and Silver prices, the reference price will now be based on T-1 NAV (previous day’s Net Asset Value) as published by respective Mutual Funds/Asset Management Companies, replacing the previous pricing mechanism.

Key Points

  • Reference price for Gold and Silver ETFs will be based on T-1 NAV published by respective AMCs
  • Change implemented due to volatility in underlying Gold and Silver commodity prices
  • Price band of ±20% will be applicable to the T-1 NAV price for trading purposes
  • All trading members are required to take note of this change

Regulatory Changes

The exchange has modified the reference price determination methodology for Gold and Silver ETFs. Previously, the reference price may have been based on different parameters, but now it will strictly follow the T-1 NAV as published by the fund houses. This ensures that the trading price bands are aligned with the actual underlying asset value as computed by the AMCs.

Compliance Requirements

  • Trading members must update their systems to recognize T-1 NAV as the reference price for Gold and Silver ETFs
  • Price band calculations must use the T-1 NAV as the base price
  • Trading members should ensure compliance with the ±20% price band limit based on T-1 NAV

Important Dates

  • Notice Date: February 1, 2026
  • Effective Date: Immediate (as per notice date)

Impact Assessment

This revision provides better price discovery and risk management for Gold and Silver ETF trading during periods of high commodity price volatility. By using T-1 NAV as reference, the price bands will better reflect the actual underlying asset values, reducing the risk of excessive price deviations. Trading members need to adjust their systems accordingly. The measure protects investors from extreme price movements while maintaining market liquidity with the ±20% band.

Impact Justification

Affects pricing mechanism for Gold and Silver ETFs due to commodity volatility. Medium impact as it changes reference price calculation but maintains existing ±20% band structure.