Indicative Portfolios and Yields in Mutual Fund schemes
Summary
The Securities and Exchange Board of India (SEBI) prohibits mutual funds from offering indicative portfolios and yields in debt or fixed income products. This prohibition extends to any communication regarding such indicators by mutual funds or their distributors. Compliance with this directive is monitored by Asset Management Companies and Trustees, who must report to SEBI.
Text
Advisory Committee of Mutual Funds discussed the practice... consensus that this practice should be prohibited as the indicative portfolio and indicative yield may be misleading to the investors.
It is, therefore, decided that the Mutual Funds shall not offer any indicative portfolio and indicative yield. No communication regarding the same in any manner whatsoever, shall be issued by any Mutual Fund or distributors of its products.
The compliance of the same shall be monitored by the AMC and Trustees and reported in their respective reports to SEBI.
This circular is issued in exercise of powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of regulation 77 of SEBI (Mutual Funds) Regulations, 1996...
Source: SecMarx — Indicative Portfolios and Yields in Mutual Fund schemes. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.