Bombay High Court Issues Notice To SEBI In Plea Against Mutual Fund Ads By Association Of Mutual Funds In India
A Public Interest Litigation (PIL) had been filed in the Bombay High Court seeking directions to the Securities and Exchange Board of India (SEBI) to withdraw the permission granted to the Association of Mutual Funds in India (AMFI) in relation to advertisements of mutual funds.
The PIL filed by a chartered accountant alleges that the AMFI has misused the permission/liberty granted by SEBI for the commercial benefit of its members. The petitioner claims that AMFI's Mutual Funds advertisements are entirely commercial in nature and are misleading investors.
The petitioner argues that AMFI's endorsements through advertisements like 'Mutual Funds Sahi Hai' are reckless and unfounded. It is claimed that the AMFI has a vested interest and that the ads not backed by research, are meant solely for the benefit of the organisation.
The petitioner asserted that the SEBI has a responsibility to secure the interests of investors and regulate the securities market. He contended that the function of investor education and awareness cannot be delegated to a private or commercial body.
The petitioner states that the AMFI's ads are misleading investors under the guise of investor education, and thus prays that SEBI direct the AMFI to refrain from such advertisements.
A division bench of Chief Justice Devendra Kumar Upadhyay and Justice Amit Borkar heard the matter today and issued notices to the SEBI and AMFI.
Case title: Chandrakant C Shah vs. SEBI (PIL/84/2024)