Swing pricing

A debt scheme has net assets of ₹500 cr at NAV ₹40.00. Net redemptions of ₹50 cr (at NAV) arrive on a day when selling its bonds costs 1.5% of the value sold (illustrative). (a) Without swing pricing, the fund pays ₹40.00 a unit and sells bonds to raise the cash. Compute the NAV of the remaining units. (b) Repeat with a swing factor of 1.5% applied to the redemption price. (c) Suppose the fund can pay 40% of the day's redemption proceeds from cash at no cost and must sell bonds for the remaining 60%. Derive the swing factor that leaves the remaining holders exactly whole, and compute it. Check your answer by computing the remaining NAV. (d) Why does SEBI's framework make swing pricing mandatory only for some schemes during a declared market dislocation? Relate your answer to (6B.30).