Mumbai: The Securities and Exchange Board of India has proposed to change the cut-off timings to determine net asset value with respect to redemption of units in overnight mutual fund schemes from 3pm to 7 pm.

"The change is proposed in order to allow time to stockbrokers/clearing members to un-pledge units of MFOS (mutual fund overnight schemes) and place redemption requests with mutual funds, after the close of market hours," Sebi said in a discussion paper on Monday. The regulator said overnight schemes receive money invested in securities with one day maturity on the next working day.

To meet redemption requests, the overnight schemes dont have to make any sale transaction before market hours. Instead, these schemes, based on redemption requests, may decide not to reinvest the maturity proceeds to be received on T+1 settlement date.