The Securities and Exchange Board of India (SEBI) has established guidelines for mutual funds that manage silver ETFs.
SEBI wants mutual funds to arrive at the value of silver according to the London Bullion Market Association, just like gold ETFs (LBMA).
According to SEBI, silver owned by an exchange traded fund (ETF) shall be valued at the “AM fixing price of London Bullion Market Association in US dollars per troy ounce for silver having a purity of 999.0 parts per thousand for silver having a fineness of 999.0 parts per thousand.”
It will be necessary to convert the value of silver into Indian measures and money.
Furthermore, transportation and other costs associated with transporting such silver from London to the location where it is actually housed for mutual funds must be factored into the pricing.
Customs duties, taxes, and other levies that may apply must all be taken into account.
“Silver ETFs will give investors another way to participate in commodities as an asset class. Due to its low correlation with other asset classes, it would also assist investors in diversifying their portfolio as part of their asset allocation “Nippon Life India Asset Mutual Fund’s deputy head – ETF, Hemen Bhatia, stated.
Silver ETFs would have to store their silver assets with custodians who are SEBI-registered.
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