Mutual Funds

SEBI revamps ETF trading framework with dynamic price bands

Dynamic bands aim to align ETF prices more closely with their underlying NAV, reducing price distortions and improving market efficiency. For fund managers, this could mean tighter tracking errors and lower risk of abrupt price swings. Investors and traders gain clearer price signals, potentially enhancing liquidity and price discovery. The change also signals SEBI’s intent to modernise market infrastructure in line with global best practices.