T-1 circuit limit proposal aims to reduce pricing mismatch
Srivastava said the current system creates a mismatch between ETF circuit limits and actual market movements.He said, “Circuit limits which are applied on ETFs are based on T-2 NAV… unlike stocks where circuit limits are based on T-1 closing.”
He added that the change could align ETF trading limits more closely with market conditions.
Srivastava said, “If there is a significant movement on T-1 day, the circuit limits of ETFs are not aligned with the market on that particular day.”
Concerns on phase-wise circuit limits for commodity ETFs
SEBI has also proposed moving away from the current 20% circuit band to a phase-wise circuit structure. Srivastava said ETFs are used by investors to track spot prices and allow trading during market moves.
He added that commodity trading across different market timings could make uniform circuit rules challenging.
Gold and silver ETF trading activity remains high
Srivastava said investor participation in gold and silver ETFs remains strong based on flows and exchange liquidity.
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He said gold ETFs saw inflows of about ₹24,000 crore last month, while silver ETFs saw inflows of over ₹9,000 crore.
He said, “On exchange, we are seeing daily liquidity of almost ₹8,000 crore in both gold and silver.”
He added that silver is seeing higher trading turnover compared to gold, indicating higher short-term trading activity.
Copper ETFs may require derivative-based replication
On potential copper ETFs, Srivastava said physical storage requirements may be a constraint under current rules.
He said, “SEBI has only allowed ETFs on commodities, which can be physically replicated… when it comes to copper, it will be a very humongous task.”
He added that derivative-based replication could help expand the commodity ETF market.
For the full interview, watch the accompanying video
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