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SEBI has warned fund houses for violating advertisement code and advised them to immediately remove such communication.
SEBI found that a few fund houses advertise SIPs and SWPs as fixed return instruments.
The market regulator found advertisements carrying illustrations which say investors to receive ‘Rs.x’ amount through SWP if they do SIP of ‘Rs.x’ amount. SEBI said, “Illustrations are provided in the advertisements/presentations/brochures/pamphlets, which would lead investors to believe that they will be receiving fixed returns for their investments including that of SIPs by demonstrating SWP as a multiple of SIP.”
SEBI further said that while illustrations depict future returns based on assumptions and projections, such a disclaimer is made in fine print that investors may miss out.
SEBI said, “Such disclosures are ambiguous and likely to be misunderstood by investors and are not in compliance with letter and spirit of provision of sixth schedule of SEBI (Mutual Funds) Regulations, 1996.”
SEBI has asked AMFI to advise their members to remove such advertisement immediately. The market regulator has also asked AMFI to tell distributors not to use such communication.
