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TMI BlogGuidelines for advertisement by Mutual FundsX X X X Extracts X X X X X X X X Extracts X X X X ..... chedule VI) prescribed under SEBI (Mutual Funds) Regulations, 1996 and shall be followed wherever applicable. SECTION I - APPLICABILITY 1. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt to advertisement and/or distribution of sales literature. e. Refrain from using exaggerated or unwarrnated claims, superlatives and opinions, which cannot be substantiated by the available public data. Avoid future forecasts and estimates of growth. f. Do not treat disclosure of risks as required by Regulations 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation prohibited in this form of advertisement : NAVs and performance figures of any of the previous schemes unless such performance statements conform to these guidelines. Comparisons with any other funds/schemes. Ranking by any ranking agencies. Issue of product launch advertisements must be accompanied or preceded by issue of offer document. All that is stated in product launch advertisement should be substantiated with the office document. These advertisements must also state from whom a copy or prospectus and abridged offer document along with an application 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BSE Sensex, NSE Fifty, or BSE 100 or CRISIL 500 or similar standard indices. Once chosen, a benchmark cannot be changed unless the funds portfolio has undergone a major shift in asset allocation and the change has been approved by the trustees. Income funds with 60% or more of investments in debt instruments should be compared with a suitable index that is a surrogate for the funds portfolio. Balanced funds with equity investments of 40% - 60% should be compared with a tailored index having 50% of its weight selected from any equity index as above and the other 50% from an appropriate bond return index (e.g., I-sec Bond Total Return Index, etc.) Money Market funds or liquid plans can be compared against 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e.g., a star system) rather than a number, the advertisement or sales literature also must disclose the meaning of the symbol (e.g., a four-star ranking indicates that the fund is in the top 30% of all mutual fund schemes). 2. All advertisements and sales literature containing a ranking must disclose in the main body of the advertisement that past performance is no guarantee of future results. TIME PERIODS 1. Any ranking set forth in an advertisement or sales literature must be current to the most recent calendar quarter ended, in the case of advertising prior to the submission for publication, or in the case of sales literature prior to use. 2. Except for money market mutual funds : A. Advertisements and sales literature must not use any rankings other than rankings based on yield for a period of less than one year; B. A ranking based on compounded annualised yield must be accomplished by rankings based 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 exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... created by the Asset Management Company/Mutual Fund, including a sub-category of a category established by a Ranking Entity, the advertisement must prominently disclose : A. the fact that the Asset Management Company/Mutual Fund has created the ranking category; B. the number of schemes in the category; C. the basis for selecting the category; and D. the Ranking Entity that developed the research on which the ranking is based. An advertisement or sales literature containing a headline or other prominent statement that proclaims an Asset Management Company/Mutual Fund ranking created by an Asset Management Company/ Mutual Fund, it should be mentioned in close proximity the headline or statement, that the ranking is based upon a category created by the Asset Management Company/Mutual Fund. MULTIPLY CLASS/TWO-TIER FUNDS The rankings for more than one class of Asset Management Company/Mutual Fund Schemes with the same portfolio must be accompanied by prominent disclosure of the fact that the scheme or classes of scheme have a common portfolio. SECTION IV - SALES LITERATURE 1. Any c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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