In a recent board meeting, SEBI has reviewed the SEBI (Mutual Fund) Regulations, 1996.
With respect to the advertisement guidelines pertaining to furnishing of information related to the performance of mutual fund schemes, it has been decided that mutual funds shall publish the performance data in terms of compound annual growth rate of previous 1 year, 3 years, 5 years and since inception. Further, the data to be provided should be as on the last day of the month, instead of quarter-end. This will provide the investors with a more recent and accurate performance of the scheme and assist them in taking well informed decisions.
SEBI has also decided to allow the mutual funds to invest in REITs/InvITs subject to a maximum investment of 10% of Net Asset Value (NAV) of the scheme in the units of such instruments and a cap of 5% of NAV in a single issuer of REIT/InvIT. Further, the total investment by all schemes of one mutual fund in a single issuer cannot be more than 10% of the units issued by such issuer. The proposed changes are brought with an intent to invest the investors’ money in a variety of instruments so that the risks associated with investment may be spread. It will also attract investments in REITs/InvITs.
SEBI has always been more observant towards the mutual fund industry as it attracts huge investment both in terms of value and number of investors. These guidelines are a step forward towards achieving greater clarity and restoring investors’ confidence in the industry.