TaxTMI 
TaxTMI 
Guidelines for advertisement by Mutual Funds
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....he guidelines mentioned hereunder shall apply to all forms of advertisements, communications, sales literature, howsoever released. These guidelines will also apply to T.V. interviews, public speaking, presentations in seminars and workshops, whichever the forum is used by the mutual funds concerned, so long as such fora are used to market their schemes or convey the performance of their schemes. Advertisement : Any material published or designed to be published on which a mutual fund has no control over the audience and which is broadly distributed. The purpose of such communication shall be either to sell mutual fund units or to convey the performance of their funds or to influence the opinion or behaviour of those who receive such communication. All material contained in such advertisements must be verified or substantiated in the offer document of the fund. Sales Literature : Any written communication offering to sell or induce the sale of units of a fund, distributed or otherwise made available to the customers or to the unitholders. The purpose of such communication shall be either to sell mutual fund units or to convey the performance of their funds or to influence the opi....
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....s as hedge in communications with investors/customers. g. Statistical information, charts, graphs, etc., when used should be supported by their source, if any. h. Refrain from making comparisons unless essential to the form and content of the advertisement. If used, such comparisons must be clear and unambiguous. SECTION III - FORMS OF ADVERTISEMENTS Advertisements are classified into the following categories with restrictions placed on each of such types. Tombstone advertisement : 1. 1[This form of advertisement can only give basic information about a (i) Mutual fund registered with SEBI whose Statement of Additional Information is filed with SEBI and has been uploaded on its website; or (ii) Scheme which is already launched and is in existence and whose Scheme information document is available.] General Information : * Name of the mutual fund/scheme and the Assets Management Company; * Scheme classification (i.e., income/growth, etc.,) indicating basic objectives of the scheme, i.e., capital appreciation and/or regular income or assured returns with or without assurances for capital, or balanced with income and capital appreciation; * Logo or trademark; if any ....
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....ation form may be obtained and that an investor should read the offer document before investing in the scheme. Performance Advertisement: 3. If any mutual fund uses performance figures in any of its advertisements or sales literature or release/issue exclusive performance advertisements, such performance advertising must ad here to the following guidelines : 1. Such advertisement/statements must identify the nature of the scheme and its basic investment objective. 2. The dividends declared or paid shall also be mentioned in rupees per unit along with the face value of each unit of that scheme and the prevailing NAV at the time of declaration of the dividend. 3. Only compounded annualised yield can be advertised if the scheme has been in existence for more than 1 year. For the calculation of compounded annualised yield the procedure prescribed in the Standard Offer Document shall be followed. All performance calculations shall be passed only on NAV and the payouts to the unitholders. The calculation of returns shall assume that all payouts during the period have been reinvested in the units of the scheme at the then prevailing NAV and it should be clarified in the advertisem....
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....t a suitable money market instrument or a combination of such instruments. 4. Use of Rankings in Advertisements and Sales Literature. a. Definition of "Ranking Entity" - For purposes of the following guidelines, the term "Ranking Entity" refers to any entity that provides general information about asset management companies/mutual funds to the public, that is independent of the asset management company/mutual fund and its affiliates, and whose services are not procured by the asset management company/mutual fund or any of its affiliates to assign the asset management company/mutual fund a ranking. b. General Prohibition - Asset Management Company/Mutual Fund shall not use in advertisements, sales literature or general promotional material any rankings other than those developed and produced by entities that meet the definition of "Ranking Entity" and which conform to the requirements of the guidelines herein. c. Required Disclosures : HEADLINES/PROMINENT STATEMENTS A. A headline or other prominent statement must not state or imply that an Asset Management Company/Mutual Fund is the best performer in a category unless it is actually ranked first in the category. B. Promi....
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....on returns for one year period for scheme in existence for at least one year; one and five year periods for schemes in existence for at least five years, and one, five and ten year periods for scheme in existence for at least ten years supplied by the same Ranking Entity, relating to the same category, and based on the same time period; provided that, if rankings for such one, five and ten year time periods are not published by the Ranking Entity, then rankings representing short, medium and long-term performance must be provided in place of rankings for the required time periods; and C. A ranking based on yield may be based only on the current standardised yield 2. A ranking based on the current standardised yield must be accompanied by rankings based on total return for one year period for scheme in existence for at least one year; one and five year periods for scheme in existence for at least five years, and one, five and ten year periods for scheme in existence for at least ten years supplied by the same Ranking Entity relating to the same category, and based on the same time period; provided that, if rankings for such, one, five and ten year time periods are not published by....