Sebi reviews advertisement guidelines of mutual funds

While reviewing the advertising guidelines for mutual funds, SEBI has now permitted celebrity endorsements at industry level, to increase awareness.

As per the regulator, such celebrity endorsements should not promote a scheme of a particular Mutual Fund or be used as a branding exercise of a Mutual Fund house. Prior approval of SEBI shall be required for issuance of any endorsement which features a celebrity.

SEBI has mandated mutual funds to set aside least 2 basis points on daily net assets for investor education and awareness initiatives. A part of this is set aside by AMCs to be spent at industry level.


On advertising performance of Mutual Fund schemes, the regulator specified that returns should be advertised in terms of CAGR for the past 1 year, 3 years, 5 years and since inception.

In order to provide ease of understanding to retail investors, point-to-point returns on a standard investment of Rs 10,000 shall also be provided in addition to CAGR of the scheme.

The fund house should also mention, whether performance is of regular or direct plan along -with a footnote mentioning that different plans have a different expense structure.

If a Mutual Fund scheme has not been managed by the same fund manager for the full period of the information being published in the advertisement, the same should be disclosed in a footnote.

When advertising performance of a scheme, it will also include the performance data of all the other schemes managed by the fund manager/s of that particular scheme.