New Delhi, Jun 5 (PTI) Market regulator Sebi on Friday said mutual funds cannot invest in physical goods barring gold through gold exchange traded funds (ETFs).

Exchange traded commodity derivatives (ETCDs) having gold as the underlying asset would be considered as 'gold-related instrument' for gold ETFs.

Also Read | Tamannaah Bhatia Wears Black Paint As She Stands For #AllLivesMatter; Fans Finds Her Post Silly and Insensitive.

"No mutual fund schemes shall invest in physical goods except in 'gold' through Gold ETFs," the Securities and Exchange Board of India (Sebi) said in a circular.

However, as mutual fund schemes participating in ETCDs may hold the underlying goods in case of physical settlement of contracts, in that case the mutual funds will have to dispose of such goods from the books of the scheme at the earliest.

Also Read | Telegram Launches In-App Video Editor, Two-Step Verification, Animated Stickers, Speaking GIFs & More; Takes On WhatsApp.

With regard to physical gold and silver, Sebi said such goods will have to be disposed of not exceeding 180 days from the date of holding of such physical goods. 

For other goods, funds need to dispose them by the immediate next expiry day of the same contract series of the commodity. 

"However, if final expiry date of the goods falls before the immediate next expiry day of the same contract series of the said commodity, then within 30 days from the date of holding of physical goods," the regulator noted.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)