Gold-Silver ETF

Gold-Silver ETF: If you are also among those investors who consider it safe to invest money in precious metals through ETFs instead of physical gold and silver, then this news is directly related to your pocket. It is often seen that the prices of gold in the international market are different, but the prices of ETFs in the Indian market tell a different story. Due to this difference, many times investors have to suffer losses even without wanting to or they are unable to buy and sell at the right price. Now market regulator SEBI has geared up to root out this problem and has prepared a blueprint for a major change in the rules.

Why was the change in rules necessary?

First of all it is important to understand where the problem is. Actually, gold and silver are traded almost 24 hours in international markets. There may be a big movement there at midnight, prices may suddenly skyrocket or fall. But in India, ETFs are traded only during limited market hours.

Under current rules, ETF prices are subject to a 'fixed price band'. That means the price cannot go up or down more than a certain limit in a day. When there is major upheaval in the global market, Indian ETFs are not able to fully adapt to that change due to their fixed bands. The result is that there is a big difference between the price of the ETF and its real value (NAV). SEBI believes that this system is now outdated and change in it is the need of the hour.

Not fixed, now price band will be 'dynamic'

SEBI has proposed in its consultation paper dated 14 February 2026 that the old fixed system should be removed and 'dynamic price band' should be implemented. This new system will be able to adapt itself to the fluctuations of the market. According to the proposal, the initial price band will be ±6%. If there is movement in the market, it can be increased in a phased manner.

Understand it this way, if there is a sudden rise in the price of gold, this band will increase by 3% more. After every change, a 'cooling-off period' of 15 minutes will be given for the market to calm down a bit. This can be done maximum twice in a day and the total limit can go up to ±20%. Its direct benefit will be that the price of the ETF that the investor will see on the screen will be very close to its actual value.

Direction will be decided even before the market opens

SEBI has given another important suggestion, which is the introduction of 'Pre-Open Session'. Like the stock market, now there can be a special session for gold and silver ETFs also before the market opens. Its purpose is that whatever changes have taken place in the foreign markets overnight should be adjusted before the Indian market opens. This will reduce the huge gap seen in prices as soon as the market opens in the morning and investors will get a balanced start.

Strict conditions to prevent tampering

Security has also been taken full care of in the new rules. SEBI has laid down strict conditions to ensure that no operator deliberately increases the prices and gets the band changed. Change in price band (flex) will be applicable only if there are at least 50 trades, involving 10 different clients and participation from three different trading members. That means change will happen only when actual buying and selling is taking place in the market. At present, SEBI has sought public opinion on this proposal till March 2026, after which it will be finalized.

Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money related decisions.