The Securities and Exchange Board of India (Sebi) has directed mutual fund houses to standardise their fact sheets or the monthly information documents sent to unit holders. The move is aimed at bringing about more transparency and uniformity and helping investors take more informed investment decisions.
Asset management companies (AMCs) will have to provide information such as dividend history and total monthly expenses in a format prescribed by the Association of Mutual Funds of India (Amfi). Also, fund houses will have to present certain data in a graphical and easy-to-read manner. The move follows Sebi citing lack of uniformity in the fact sheets presented by various fund houses.
Further, AMCs should filter information that was non-standardised and define parameters for information that differed in content, formula and presentation across different fund houses, it added.
Though publishing fact sheets isn™t mandatory under Sebi™s mutual fund regulations, AMCs have been doing so for several years.
The use of technologies and systems varies across fund houses ” if a particular fund house highlights an additional parameter based on its investment philosophy, it is considered a requirement for other fund houses.
Hence, SEBI wants a better and improvised disclosure standard for the mutual funds to have an effective monitoring system.