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MF News Celebrities can endorse MF: SEBI

Celebrities can endorse MF: SEBI

Now, investors can see Amitabh Bachchan or Shah Rukh Khan advertise mutual funds.
Daya R Mar 16, 2017

If you switch on your television and see a celebrity like Amitabh Bachchan or Shah Rukh Khan endorsing mutual funds, do not be surprised. Because, SEBI has now permitted celebrity endorsements at industry level to increase awareness about mutual funds.

The regulator has reviewed the advertising guidelines and said that celebrities should not promote a scheme of a particular mutual fund or be used as a branding exercise of a fund house. SEBI has also insisted on prior approval for such endorsements

Further, SEBI has asked AMCs to set aside two basis points on daily net assets for IAPs. Of the funds set aside for IAPs, a portion must be is set aside by AMCs to spend at industry level, the regulator said

With regard to advertising the performance of mutual fund schemes, SEBI has instructed AMCs to advertise their returns in terms of CAGR for the past 1 year, 3 years, 5 years and since inception. Along with this a point-to-point returns chart on a standard investment of Rs 10,000 must be given to help investors understand better, the circular said.

The circular added that a distinction must be made between the performance of regular and direct plans along-with a footnote mentioning that different plans have different expense structures.

In case of a change in the fund manager during the period of the scheme, the investors should be made aware of it in the advertisement, the circular said.

3 Comments
Yvs Suresh Kumar · 2 months ago
Expenses of such should be taken care separately and should not levy on either investor or IFA.
Bayyaram Manohar · 2 months ago
This is Good and Bad decision, Celebrities may bring in new investors to the MF industries in Bull Markets. Bad will be when market enter bear for extended period these new investors will book losses and will never enter participate in equity markets. The investors will not be guided to stay in the market, and forget investing more when markets are down. For example some of the equity funds have not given
8% returns also for last 2 years inspite of markets in all time high now, where from these investors will have confidence. Investors guided by Advisors/Distributors are guided to invest more when markets were down, thereby reaping the good returns. Celebrities can bring new investors, but not all investors will stay.
Niladri saha · 2 months ago
Urgent require Digital system implemention all IFA Group.
Other wise very difficulty to survive most of the IFA.
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