Economics · Economy

Valuation of securities is a critical function performed by mutual funds to arrive at a fair and accurate Net Asset Value, which represents the per unit market value of the scheme. The process of valuation for different types of securities, such as listed equities, debt instruments, and unlisted securities, is governed by specific principles laid down by the regulator to prevent any manipulation or misrepresentation of the fund performance. For debt and money market instruments, the valuation must reflect the current market conditions and the credit risk associated with the issuer. In a scenario where a debt security is not traded on a particular day on any recognized stock exchange, the mutual fund must use a valuation methodology that considers various factors including the yield to maturity of comparable securities. As per the SEBI/AMFI guidelines, what is the specific timeframe or threshold for a debt security to be considered as a non-traded security for valuation purposes?