Sebi unhappy with fixed return advertisement to investors, asked to remove mutual funds immediately

SEBI To Mutual Funds: The Securities and Exchange Board of India, the regulator of the stock market, has asked mutual funds to avoid luring investors through misleading advertisements like fixed returns. . SEBI has ordered all mutual fund companies to immediately withdraw such advertisements or presentations in circulation.

SEBI has written a letter to the Association of Mutual Funds in India. In the letter, the regulator has said that it has been observed that some mutual fund houses present such examples in their advertisements, presentations, which would make investors believe that fixed returns on their investments would be available in future. Will get on their investment.

SEBI has written in its letter that in the examples, future returns are shown on the basis of estimates. The assumptions and disclaimers present in the fine print may confuse investors. SEBI has written about Systematic Switch Plans (SWPs) in its letter, in which it has been said with the example of getting regular returns.

Systematic Switch Plans (SWPs) are the opposite of SIP (Systematic Investment Plan) which allows investors to withdraw a fixed portion of their corpus every month. Retired people use this scheme more so that they can meet their regular expenses.

SEBI has asked mutual funds to follow the Advertisement Code prescribed by the regulator. This regulation does not allow the fund house to promise returns as mutual funds invest in equity and debt markets, which go through ups and downs due to various reasons.

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