New norms for capital protection

The Securities and Exchange Board of India on Thursday issued detailed guidelines for the proposed capital protection schemes by mutual funds, under which AMCs have been asked to clearly mention, in their advertisements, that such schemes are "oriented towards protection of capital" and "with no guaranteed returns".

Under the guidelines, trustees should continuously monitor the portfolio structure of such schemes. The trustees are also required to mention the same in the half-yearly trustee reports. AMCs should also report the same in their bimonthly compliance test report.

The Sebi asked AMCs to communicate to investors the orientation towards protection of capital originates from the portfolio structure of such a scheme "� and not anything like bank guarantee and insurance cover.