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Market regulator SEBI has directed mutual funds (MFs) to stop using misleading illustrations in advertisements, brochures and presentations to depict that there will be fixed return on investments.
“It has been noticed that some of the Asset Management Companies are indulging in practices relating to advertisements, which are not in letter and spirit compliance with the Advertisement Code prescribed in SEBI (Mutual Fund) Regulations, 1996,” it said.
SEBI said the illustrations show future returns on the basis of assumptions and projections. Though disclaimers and assumptions are in fine print, it is likely to be missed out by the investors, it said.
It asked AMCs to refrain from such practices in future and remove such advertisements from all the medium and to advise their distributors not to use them.
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