The Securities and Exchange Board of India (SEBI) has rolled out revised cut-off timings for redeeming investments in overnight and liquid mutual fund schemes, effective June 1, 2025. This move is designed to align fund operations with regulatory safeguards and ensure smoother settlement processes for client funds.
Until now, a uniform cut-off time has applied across both online and offline redemption modes. That’s about to change. SEBI’s new guidelines introduce separate redemption cut-off timings for online and offline modes:
Note: Business days exclude holidays and days when money markets are closed.
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This update ties into SEBI’s broader upstreaming framework implemented in December 2023. Under this framework, all brokers and clearing members must transfer client funds to clearing corporations by the end of the day.
These transfers may take the form of:
To ensure pledged units can be effectively used in settlements, SEBI needed to synchronise redemption cut-off times with the fund transfer schedule.
This move was recommended by a working group that included the Association of Mutual Funds in India (AMFI) and was finalised after public consultation.
If you invest in overnight or liquid mutual funds, the timing of your redemption requests now plays a more important role:
Miss the cut-off, and the applicable NAV shifts, potentially affecting your returns.
SEBI’s updated redemption rules are meant to tighten fund handling processes while offering greater transparency and protection for investors. Keep a close eye on timing, because when you redeem now matters more than ever.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jun 2, 2025, 12:22 PM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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