Under revised SEBI circulars, what is the extended cut-off timing for submitting online repurchase/redemption applications in Overnight fund schemes, and what NAV applies if submitted before this cut-off?

[ A ]Cut-off timing is 1:00 PM; closing NAV of 30 days prior applies.

[ B ]Cut-off timing is 11:59 PM; closing NAV of the following month applies.

[ C ]Cut-off timing is 9:00 AM; closing NAV of the next business day applies.

[ D ]Cut-off timing is extended to 7:00 PM for online applications; closing NAV of the day immediately preceding the next business day applies.[ CORRECT ]

Takeaway

Option D is correct: Cut-off timing is extended to 7:00 PM for online applications; closing NAV of the day immediately preceding the next business day applies.

Derivation

Under SEBI circulars on cut-off timings, the cut-off timing for redemption/repurchase of units in Overnight fund schemes submitted through online digital platforms has been extended to 7:00 PM. For applications received up to the cut-off time on a business day, the closing NAV of the day immediately preceding the next business day is applicable. This provides corporate and treasury unitholders extended liquidity windows. This tests recent operational updates for overnight schemes. The common error is assuming the traditional 3:00 PM physical cut-off applies to online overnight redemptions.

Why the others fail

A — Cut-off timing is 1:00 PM; closing NAV of 30 days prior applies.

1:00 PM is an incorrect time and allocating 30-day prior NAV violates all fundamental NAV calculation principles.

B — Cut-off timing is 11:59 PM; closing NAV of the following month applies.

The extended digital window closes at 7:00 PM, not midnight, and NAV of the following month cannot be arbitrarily applied.

C — Cut-off timing is 9:00 AM; closing NAV of the next business day applies.

9:00 AM is the market opening hour; SEBI has extended online overnight redemption cut-offs up to 7:00 PM.