New Delhi, Feb. 26 -- The Securities and Exchange Board of India (Sebi) has changed how mutual funds value physical gold and silver, directing them to move from global benchmark pricing to domestic spot prices.

In a circular issued on Thursday, the market regulator said mutual funds will now value physical gold and silver held by schemes using polled spot prices published by stock exchanges. These prices are the same benchmarks used for settlement of physically delivered gold and silver derivatives contracts on exchanges.

Currently, gold and silver exchange-traded funds (ETFs) value their physical holdings based on the London Bullion Market Association's (LBMA) AM (morning) fixing prices. The final valuation is calculated by adjusting t...