 "PIL in Bombay HC seeks action against 'Mutual Fund Sahi Hai' ads by Amfi")
A public interest litigation has been filed in the Bombay High Court seeking directions to Securities and Exchange Board of India (Sebi) to revoke the permissions granted to mutual fund body Association of Mutual Funds in India (Amfi) to desist from “misleading” and “deceptive” advertisement campaigns under the investor education and protection measures.
The petitioner, a chartered accountant, has alleged that Amfi was “recklessly propagating that mutual funds are right without any basis or rationale”.
“The ad campaigns are completely unfounded, reckless, false, baseless, and misleading with selective and distorted emphasis on positive features,” the petitioner alleged.
The Bombay HC on December 18 appointed an amicus curiae in the matter considering the public interest involved and directed issuance of notice to Sebi and Amfi.
Comparing the advertisements by Amfi to those of other institutions such as the Reserve Bank of India (RBI), National Stock Exchange (NSE), and Sebi itself, the petitioner said that the aforementioned ads do not solicit any business, don’t have any commercial motive, and are to “truly” to serve the public good unlike the Amfi ads which have commercial motive.
“There is no element, whatsoever, of investor education or awareness in the ad campaigns propagated by Amfi. These ad campaigns do not highlight or mention about the features and characteristics of mutual funds, its limitations / constraints, etc., but only emphatically endorse and opine that mutual funds are right (sahi hai) without any basis or merits, with a small sidelined disclaimer,” states the petition.
The petitioner has added that such endorsements are commercial in nature and meant only to benefit the members of Amfi with least concerns on investor protection.