Advertising regulator ASCI to probe AMFI ad on mutual fund investments

MUMBAI: India's advertising regulator has initiated a probe into allegations that a television promotional campaign by the Association of Mutual Funds in India ( AMFI) was masking the risky nature of mutual fund investments by equating them with savings.

A sector expert had complained against the advertisements, which describe mutual fund investments as "savings ka naya tareeka", saying they circumvent the market regulator's advertising regulations on MFs. The advertisements also do not carry the mandatory disclaimer at the end.

The Advertising Standards Council of India ( ASCI) has asked Publicis Capital, the agency that created the advertisements, to respond to the complaint. The council will then call the two sides for a hearing.

"The advertisements contain some patently misleading statements and do not carry customary risk factors of mutual funds," said the complainant VT Gokhale, a former ABN AMRO investment banker.

Srbi guidelines require mutual fund advertisements to carry a disclaimer that such investments are subject to market risks. But AMFI said the campaign was meant to create awareness among investors and was not selling any fund scheme.

"It's just an effort to help people look at this as an option to channelise their savings," said HN Sinor, CEO of the association. "Returns on a mutual fund are linked to its earnings," said MS Apte, member of Sebi's mutual fund advisory panel.