This facility allows investors to earn one day’s return by getting previous day’s NAV by investing and redeeming on the same day.
NSE has introduced ‘overnight liquid investment’ facility on its NMF II platform which allows investors to get the previous day’s NAV by investing and redeeming the same day and earn a day’s returns.
“This feature allows you to invest your funds in liquid mutual funds overnight i.e. you invest at (T-1) NAV and redeem at (T) day NAV on the same day and get the redemption proceeds in your account on next day,” states a note sent by NSE.
The cut off for transactions to obtain T-1 day NAV is 1.00 pm. The cut off of 1.00 pm is applicable for both order entries on platform and transfer of funds in The National Securities Clearing Corporation (NSCCL) account. The money is first deposited in NSCCL and NSCCL in turn sends it to the scheme account before 2 pm, which is the cut off time for liquid funds.
So far, this facility was only available to the main members of NSE. Now, IFAs registered with NMF II platform can also use this facility. This will help IFAs to position this facility among retail investors. The minimum ticket size for investments in liquid funds for retail investors is typically Rs. 5,000. If an investor invests Rs.10 lakh in a liquid fund delivering CAGR of 8%, she can earn Rs. 267 in a day by executing overnight transaction through the platform.
Distributors can initiate transactions on behalf of their clients through RTGS/ NEFT. Overnight liquid transactions are allowed in non demat mode only.
NSE’s rival BSE had introduced this facility on its StAR MF platform last year.
