Product labelling guidelines for mutual funds soon: SEBI

SEBI will shortly issue guidelines on product labelling with colour coding for mutual fund products for risk assessment, a top official of the capital market regulator said here on Saturday.

"Product labelling is an important investors' education agenda. So very shortly, we'll be issuing our guidelines on product labelling for mutual funds," Security and Exchange Board of India (SEBI) executive director S.V. Muralidhar Rao told reporters on the sidelines of 6th ICC Mutual Fund Summit.

The labelling of mutual fund products would also be with specific colour codes according to the associated risk elements, Rao said.

Product labelling in mutual fund industry in India has assumed significance with misselling of products to customers becoming a major concern.

"Offer documents will have colour coding as per risk-level associated with the product. It may not solve the entire problem of misselling, but colour coding is still better as it will give some kind of indications to investors," Association of Mutual Funds In India deputy chief executive V. Ramesh said.

Rao said that SEBI was also coming out with a long-term policy for the mutual fund industry.

"The policy will basically deal with taxation issue and financial inclusion. We are going to deliberate it at our mutual fund advisory committee meeting."

On infra-financing mutual fund products, he said SEBI had already approved that there would be some amendments in regulations as no such specific schemes were "found to be floating".