FundNews: SEBI warns MFs on incomprehensible TV, audio

[K.Karthik Raja]

FundNews: SEBI warns MFs on incomprehensible TV, audio commercials ,
Wednesday, Feb 27

MUMBAI - As per information on Securities and Exchange Board of
India Web site, the regulator has issued directives to mutual funds to
ensure their advertisements in the audio-visual media is better
comprehended by investors.
"The rapid fire manner in which the standard warning - 'mutual
fund
investments are subject to market risks. Read the offer document
carefully before investing' is recited in the audio-visual and audio
media renders it unintelligible to the viewer/listener," SEBI said.
In order to improve the manner the message is conveyed, the
regulator has issued the following guidelines, effective Apr 1:
--The time for display and voice over of the standard warning be
enhanced to five seconds in audio-visual advertisements.
--In case of audio advertisements, the standard warning shall be
read in an easily understandable manner over a period of five seconds.
The guidelines have been issued in exercise of powers conferred
under Section 11(1) of Securities and Exchange Board of India Act,
1992, read with provisions of Regulation 77 of SEBI (Mutual Funds)
Regulations, 1996.
At a recent mutual funds event on Feb 5, C. Rangarajan, chairman,
Prime Minister's Economic Advisory Council, came down strongly on
mutual funds' advertisements.
"The rapid-fire manner in which the statutory warning is read
ensures that it is effectively suppressed," Rangarajan had said.
On the same platform, A.P. Kurian, chairman, Association of Mutual
Funds in India, in a polite retort said the issue was being looked
into and was being discussed with the regulator.


K.Karthik Raja
www.kences1.blogspot.com