Mutual funds can implement new disclosure rules on risk, portfolio details till Sep 1: Sebi

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NEW DELHI : Markets regulator Sebi on Monday gave time till September 1 for mutual funds to comply with new rules wherein they are required to share details of risk, performance and portfolio to investors only for the scheme in which they have invested.

The new norms were to come into effect from June 1.

Based on the representation received from industry body Amfi, it has been decided to extend the implementation date to September 1, 2021, the Securities and Exchange Board of India (Sebi) said in a circular.

In late April, Sebi asked mutual funds to make disclosures about scheme risk-o-meter, performance and portfolio details to investors only for the particular plans in which they have invested.

This was aimed at enhancing the quality of disclosure with respect to risk and performance, and portfolio of the schemes without creating information overload for the investors.

Under the new rules, mutual funds need to “disclose risk-o-meter of the scheme and benchmark while disclosing the performance of scheme vis-a-vis benchmark”.

They need to send the details of the scheme portfolio while communicating the fortnightly, monthly and half-yearly statement of the scheme portfolio via e-mail.

The disclosures need to be made to the investor only for the schemes in which the unitholders are invested as on the date on which the disclosures are stipulated.

In October 2020, Sebi revamped product labelling for mutual fund schemes under the risk-o-meter by introducing the “very high risk” category to warn investors.

This was in addition to the existing five categories to measure risks — low, low to moderate, moderate, moderately high, and high.

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