PIL Challenges AMFI Ads in Bombay HC for Misleading Claims
PIL in Bombay HC accuses AMFI’s mutual fund ads of being misleading and commercially driven. Notices issued to SEBI and AMFI for response.
Deepanjali
A Public Interest Litigation (PIL) has been filed in the Bombay High Court against the Association of Mutual Funds in India (AMFI), accusing its advertisement campaigns of being misleading and deceptive. The petitioner, a chartered accountant, has alleged that AMFI is “recklessly propagating that mutual funds are right (sahi hai) without providing any basis or rationale.”
The PIL seeks directions to the Securities and Exchange Board of India (SEBI) to revoke permissions granted to AMFI for its investor education advertisements, claiming they are commercially motivated rather than aimed at genuine investor education or protection.
The Bombay High Court, in its hearing on December 18, appointed an amicus curiae to assist in the case, recognizing the public interest involved. Notices have been issued to both SEBI and AMFI to respond to the allegations.
According to the petitioner, AMFI's advertisements are designed with a selective and distorted emphasis on the positive aspects of mutual funds, sidelining their limitations and constraints. The ads, the petitioner claims, fail to provide a balanced view and instead emphatically endorse mutual funds as the right choice with little substantive information.
The petition compares AMFI’s campaigns to those by institutions such as the Reserve Bank of India (RBI), National Stock Exchange (NSE), and SEBI itself, highlighting that these organizations focus on genuine investor education and public awareness without any commercial intent.
“There is no element of investor education or awareness in these campaigns. They do not highlight the features, risks, or limitations of mutual funds but rather focus solely on promoting them with a sidelined disclaimer,” the petition states.
The petitioner further contends that the ads are commercial endorsements aimed at benefitting AMFI’s members rather than safeguarding investors’ interests. By prioritizing promotional content over education, the campaigns allegedly compromise the core principle of investor protection.
This PIL raises critical questions about the ethics of financial advertising in India. It challenges whether industry bodies like AMFI, tasked with investor education, should engage in promotional campaigns with commercial overtones.
The case is expected to bring increased scrutiny on advertising standards for financial products and the accountability of regulatory bodies like SEBI in monitoring these campaigns.
