SEBI Boosts Transparency in Mutual Funds with New Disclosure Norms

SEBI has introduced enhanced disclosure requirements for mutual funds, including separate reporting for expenses and yields in direct and regular plans. A new color-coded risk-o-meter is launched for better risk evaluation. These changes, effective December 5, aim to augment transparency and investor protection in the mutual funds sector.

In a significant move to bolster transparency, the Securities and Exchange Board of India (SEBI) on Tuesday rolled out new disclosure requirements for mutual fund plans. These changes, set to take effect from December 5, mandate separate reporting for expenses, half-yearly returns, and annualized yields in both direct and regular mutual fund plans.

To further aid investors, SEBI has introduced a color-coded system for the existing risk-o-meter. This system ranges from 'low risk' in krish green to 'very high risk' in red, offering investors a clear visual guide to assess scheme risks.

Moreover, mutual funds are now required to alert investors of any changes in the risk-o-meter level instantly via email or SMS, ensuring stakeholders remain informed of any risk adjustments in their investments.

(With inputs from agencies.)