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.