Gold-Silver ETFs: If you're among those investors who consider investing in precious metals through ETFs (Equity Rating Ratings) safer than physical gold and silver, this news is directly relevant to your needs. It's often seen that while international gold prices are one thing, Indian ETF prices tell a different story. This discrepancy often results in investors incurring unintended losses or being unable to buy or sell at the right price. Now, market regulator SEBI has geared up to address this problem and has outlined a major change in regulations.

Why was a change in regulations necessary?

First, it's important to understand the underlying problem. In international markets, gold and silver trade almost 24 hours a day. A major movement could occur at midnight, causing prices to suddenly skyrocket or plummet. However, in India, ETFs trade only during limited market hours.

Under current regulations, ETF prices are subject to a fixed price band. This means that the price cannot move up or down beyond a certain limit in a single day. When there are significant fluctuations in the global market, Indian ETFs are unable to fully adapt to these changes due to their fixed band. Consequently, there is a significant difference between the ETF price and its intrinsic value (NAV). SEBI believes that this system is now outdated and that changes are necessary.

The price band will now be dynamic, not fixed.

In its consultation paper dated February 14, 2026, SEBI proposed that the old fixed system be replaced with a dynamic price band. This new system will adapt to market fluctuations. According to the proposal, the initial price band will be ±6%. If market activity intensifies, this band can be increased in stages.

Think of it this way: if gold prices suddenly rise, this band will increase by another 3%. After each change, a 15-minute cooling-off period will be provided to allow the market to calm down. This can be done a maximum of twice a day, with a total limit of ±20%. The direct benefit of this is that the ETF price displayed on the screen by investors will be very close to its actual value.

Direction will be decided before the market opens.
SEBI has made another important suggestion: the introduction of a "pre-open session." Similar to the stock market, gold and silver ETFs could now have a dedicated session before the market opens. The aim is to adjust to any changes in foreign markets overnight before the Indian market opens. This will reduce the large price gaps seen at market opening and provide investors with a balanced start.

Strict conditions to prevent manipulation
The new rules also take full care of security. SEBI has imposed strict conditions to prevent operators from deliberately increasing prices and changing the band. The price band change (FLEX) will only be implemented if at least 50 trades have occurred, involving 10 different clients and three different trading members. This means that the change will only occur if actual buying and selling is taking place in the market. Currently, SEBI has sought public comment on this proposal until March 2026, after which it will be finalized.

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