Sebi frowns on assured returns, asks MFs to remove related ads, brochures

Says MFs using illustrations based on assumptions; disclaimers made in fine print can escape investors

The Securities and Exchange Board of India (SEBI) has asked mutual funds to refrain from assuring fixed returns to investors while advertising their products. The market regulator has directed fund houses to remove all such advertisements or presentations in circulation.

In a letter to the Association of Mutual Funds in India (Amfi), Sebi observed that fund houses include certain illustrations in their advertisements, presentations and brochures that can "lead investors to believe that they will be receiving fixed returns for their investments".

"Illustrations are shown depicting future returns on the basis of assumptions and projections. Disclaimer and assumptions are made