Gold Silver ETF: Market regulator SEBI is now preparing to control the increasing volatility in the ETF market. In a consultation paper released on February 13, 2026, the regulator said that it will review the base price and price band of exchange traded funds (ETFs). Suggestions have also been sought from the public on this proposal. It is believed that this could lead to major changes in the ETF segment.
Current rules for Gold and Silver ETFs
Currently, a price band of up to 20 percent on both sides is applicable on most of the shares coming in rolling settlement. However, this rule does not apply to shares in which derivatives are available.
Strict price bands are imposed on the stocks that come under surveillance. Apart from this, there are also market-wide circuit breakers of 10 percent, 15 percent and 20 percent. These are applicable depending on which of the BSE Sensex or NSE Nifty 50 breaks the set limit first.
Why increased concern in gold and silver ETFs?
SEBI said that in the last week of January 2026, sharp fluctuations were seen in the domestic and global prices of gold and silver. Due to this, volatility in gold and silver ETFs also increased. The current price band applicable on these ETFs was based on T-2 day NAV. But in times of high volatility, this system did not prove sufficient to keep the market price in sync with the underlying asset.
Exchanges took interim steps to deal with this situation. For Gold and Silver ETFs, the closing NAV or closing price on T-1 day was made the base price. This change was possible because there was a holiday between T-1 and T day.
New proposal for equity and debt ETFs
SEBI has proposed that the initial price band for equity and debt ETFs be kept at plus or minus 10 percent. If needed, it can be increased to plus or minus 20 percent. There will be a 15-minute cooling off period and the band will be allowed to flex a maximum of twice a day.
Separate arrangements for gold and silver ETFs
The initial price band for gold and silver ETFs is proposed to be plus or minus 6 percent. If necessary, this can also be increased to plus or minus 20 percent. This will also include a cooling off period of 15 minutes.
What will be the impact on investors?
If this proposal is implemented, then the sudden sharp rise or fall of prices in ETFs can be controlled to some extent for investors. The new price band and 15-minute cooling off period will give the market time to calm down, which may reduce panic trading.
Especially in gold and silver ETFs, the difference between NAV and market price is expected to decrease. However, a temporary halt to trading during very sharp movements can also cause problems for short-term traders.
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