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There is a lot of investment in mutual funds these days. You will find people telling you many benefits of investing in it. However, no one talks about its risks. Even the advertisements for mutual funds shown on TV first praise mutual funds and then quickly point out that investing in mutual funds is subject to risks. However, after this comes a tag line, which reads ‘Mutual Funds Sahi Hai’. Now mutual funds are embroiled in controversies regarding this.
In fact, a PIL has been filed in the Bombay High Court by a chartered accountant objecting to the promotion of mutual funds. The petitioner has sought direction to SEBI (Securities and Exchange Board of India) to take necessary steps to stop the “misleading” and “misleading” advertising campaigns by the Association of Mutual Funds in India (AMFI).
allegations on advertisements
According to a Business Standard report, the petitioner has alleged that AMFI is promoting ‘Mutual Funds Sahi Hai’ without any solid basis and logic. “AMFI’s advertising campaigns only showcase the positive aspects of mutual funds without mentioning their limitations and risks. These campaigns are completely baseless, misleading and deceptive,” the petition said.
The petitioner further said that these advertising campaigns do not include any element of investor education or awareness. Instead, these are created for commercial purposes, which are solely for the benefit of AMFI members and ignore the interests of investors.
Comparison with advertisements of other institutions
The petitioner compared AMFI’s advertisements with the advertisements issued by the Reserve Bank of India (RBI), the National Stock Exchange (NSE) and SEBI itself. It has been said in the petition that these organizations do not have any commercial objective in their advertisements and their only objective is to serve the public interest. At the same time, AMFI’s advertisements are commercial in nature and are made only to benefit mutual fund companies.
High Court action
On December 18, in view of the seriousness of the case, the High Court appointed an amicus curiae (friend of the court) and issued a notice to SEBI and AMFI seeking their response. The court has taken this step keeping in mind the involvement of public interest in this issue.
petitioner’s demand
The petitioner has demanded that these advertisements of AMFI should be stopped immediately and the permission given to them by SEBI should be cancelled. The petition also states that AMFI should be forced to provide correct and complete information to investors, which includes both the benefits and risks of mutual funds.
Questions on investor protection
It has been argued in the petition that investors are being misled through these advertisements, which is against their interests. Keeping investors unaware of the risks by providing one-sided information in such campaigns is ethically wrong and harmful to investor safety. Let us tell you, SEBI and AMFI will have to clarify their position during the next hearing in this matter.
Disclaimer: (The information provided here is being provided for information only. It is important to note here that investment in the market is subject to market risks. Always seek expert advice before investing money as an investor. ABPLive.com does not advise anyone It is never advisable to invest money here.)
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