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The Association of Mutual Funds in India (AMFI) is exploring the possibility of redrafting the disclaimer – “mutual fund investments are subject to market risks.
Please read the scheme information document carefully before investing” – to add a positive flavour and encourage more investors to park their funds in such schemes.
The disclaimer along with mutual fund advertisements and offer documents were acting as a hindrance in attracting new investors, senior officials in the mutual fund industry said.
Responding to a specific query from an independent financial advisor regarding the possibility of doing away with the disclaimer, Mr V. Ramesh, Deputy Chief Executive of AMFI, said that these disclaimers were essential to safeguard the fund house from the possibility of getting entangled in litigations.
However, there needs to be some redrafting in order to give it a positive flavour, he said.
“The current disclaimer brings in a kind of fear psychosis among investors,” said Mr Ramesh, addressing the 5th mutual fund summit organised by the Indian Chamber of Commerce here on Saturday.
The thought of bringing in a change in the disclaimer note was currently at a very preliminary stage.
“There is some thought on it. We will have to get something agreeable and it has to be approved by SEBI (Securities and Exchange Board of India),” Mr Ramesh said.
Utility portal
Meanwhile, the AMFI is hopeful of getting responses for the Request for Proposal (RFP) floated for developing the mutual fund (MF) utility platform by the end of this month.
“MF Utility” is a front-end portal to facilitate efficient and cost effective transaction processing.
This facility will help customers, distributors and financial advisors to transact mutual fund schemes across all asset management companies, at one place.
“Once we get the responses then we will work on the proposal and are hopeful of commencing operations in the next three to four months, subject to appropriate clearances from SEBI,” Mr Ramesh said.
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