SEBI ISSUES COLOUR CODE FOR MUTUAL FUND SCHEMES

The Securities and Exchange Board of India (SEBI) has said that to curb mis-selling, mutual funds will have to label and colour code their schemes to indicate risk to capital invested. Blue, yellow and brown will indicate low, medium and high risk to invested capital. Fund houses would now be required to label the scheme according to nature (wealth creation, regular income), time horizon (short-/ medium- /long-term), investment objective followed by asset class and finally the risk using colour codes. The product label has to be disclosed in the scheme document, applications and advertisements. This circular comes into effect for all schemes from July 1.