BackMutual funds should label schemes: Sebi
Labelling to start from 1 July; move aimed at preventing mis-selling of mutual fund products
Premium(Abhijit Bhatlekar/Mint)
Mumbai: To prevent any mis-selling of mutual fund products, the Securities and Exchange Board of India, or Sebi, on Tuesday asked mutual fund companies to label their schemes based on parameters such as the level of risk and suitability to investors.
The labelling has to start from 1 July.
Mutual funds have to state the nature of their schemes—short, medium or long term, the investment objective, and if the funds will invest in equity or debt, the stock market regulator said.
Level of risk will have to be depicted in colour coded boxes, with blue indicating low-risk, yellow medium-risk and brown high-risk schemes.
Mutual fund schemes will also carry disclaimers that investors should consult their financial advisers if they are not clear about the suitability of the product.
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