Reliance MF drops TV ad after Sebi order
Market regulator Sebi has pulled up Reliance Mutual Fund for allegedly violating advertisement norms in television clippings of its recently-launched Reliance Infrastructure Fund.
By ET Bureau |
MUMBAI: Market regulator Sebi has pulled up Reliance Mutual Fund (MF) for allegedly violating advertisement norms in television clippings of its recently-launched Reliance Infrastructure Fund. The market regulator, in its ex-parte order passed by whole-time member Prashant Saran, has directed the MF to withdraw the advertisement in its current form and reissue it.
Sebi said Reliance MF submitted the advertisement clippings of the NFO to the board only on June 3, while the NFO had opened for subscription on May 25. Regulations require mutual funds to submit advertisements of every scheme to the board within seven days from the date of issue.
The market regulator said, in the submitted compact disc of the advertisement, the time for display and voiceover of the standard warning in the advertisement is less than the mandated time of five seconds.
"The rapid fire manner in which the standard warning "Mutual Fund investments are subject to market risks, please read the scheme information document carefully before investing" as recited in the audio visual renders it unintelligible. This leads to a situation where the investors are not able to take well-informed investment
decisions," Sebi said.
Sebi has also directed Reliance MF and Reliance Capital Management "to show-cause as to why they should not be restrained from launching any new scheme for an appropriate period for the violations". Later in the day, agencies, quoting a Reliance MF spokesperson, reported that the MF has withdrawn the advertisement of its new scheme.
Sebi said Reliance MF submitted the advertisement clippings of the NFO to the board only on June 3, while the NFO had opened for subscription on May 25. Regulations require mutual funds to submit advertisements of every scheme to the board within seven days from the date of issue.
The market regulator said, in the submitted compact disc of the advertisement, the time for display and voiceover of the standard warning in the advertisement is less than the mandated time of five seconds.
"The rapid fire manner in which the standard warning "Mutual Fund investments are subject to market risks, please read the scheme information document carefully before investing" as recited in the audio visual renders it unintelligible. This leads to a situation where the investors are not able to take well-informed investment
decisions," Sebi said.
Sebi has also directed Reliance MF and Reliance Capital Management "to show-cause as to why they should not be restrained from launching any new scheme for an appropriate period for the violations". Later in the day, agencies, quoting a Reliance MF spokesperson, reported that the MF has withdrawn the advertisement of its new scheme.
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A Reliance MF spokesperson said, "We will file our response to Sebi within the prescribed time of 15 days, to establish that there has been no violation of applicable Sebi norms. Meanwhile, a revised advertisement will be released starting tomorrow. The Reliance Infrastructure Fund NFO will close on June 23, 2009 as announced."Download
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