Ch.7 · Total Expense Ratio Limits · hard
What is the special cut-off time rule for liquid fund purchases?
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EXPLANATION
Liquid funds have a unique cut-off rule designed to prevent arbitrage: purchases submitted before 1:30 PM with funds realised in the AMC's account get the previous business day's NAV (T-1 NAV). Purchases after 1:30 PM or without funds received get the current day's NAV. This prevents large last-minute investments to exploit one day's high return.
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