According to the markets regulator Sebi, mutual funds would have to disclose scheme risk-o-meter, results, and portfolio information to investors only for the specific plans in which they have invested.
This is aimed at enhancing the quality of disclosure with respect to risk and performance and portfolio of the schemes without creating information overload on the investor, Sebi said in a circular. The new framework will be applicable with effect from June 1, 2021.
According to the regulator, mutual funds will have 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 email. 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, Sebi said.
In October 2020, Sebi revamped the product labelling on 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.