Edited By: Mohammad Haris
Last Updated: March 06, 2023, 16:46 IST
As per SEBI MF laws, no mutual fund can guarantee returns.
Sebi says illustrations supplied within the commercials, shows, brochures, and pamphlets appear to be assuring fastened returns to buyers on their investments
The Securities and Exchange Board of India (Sebi) has requested mutual fund homes to cease deceptive commercials, brochures and shows, and mentioned that the illustrations supplied within the commercials, shows, brochures, and pamphlets appear to be assuring fastened returns to buyers on their investments.
“It has been seen that among the Asset Management Companies are indulging in practices regarding commercials, which aren’t in letter and spirit compliance with the Advertisement Code prescribed in SEBI (Mutual Funds) Regulations, 1996,” Sebi said.
The regulator added it came across instances where some MFs have circulated pamphlets and brochures that are shown depicting future returns on the basis of assumptions and projections. It also said disclaimers and assumptions are in fine print that are likely to be missed out by the investors.
“Such disclosures/advertisements are ambiguous and likely to be misunderstood by the investors and are not in compliance with letter and spirit of the provisions of Sixth Schedule of SEBI (Mutual Funds) Regulations, 1996,” Sebi mentioned.
As per SEBI MF laws, no mutual fund can guarantee returns. Since all mutual funds make investments cash in fairness and debt markets, the NAVs are topic to market ups and downs. In this case, promising returns doesn’t make sense.
Sebi additionally requested mutual fund homes to chorus from such practices in future and take away such commercials/shows/pamphlets and brochures from all of the medium and to advise their distributors to not use such commercials/shows/pamphlets and brochures.
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