Advertisement & Sales Literature Guidelines

This section is critical because violations of advertisement guidelines are the fastest way for a distributor to lose their ARN and face SEBI penalties. Common violations include distributors creating WhatsApp messages or social media posts that promise specific returns — these constitute regulatory violations regardless of the medium. The key rules are as follows. First, no advertisement can guarantee or assure returns — not even by implication. Stating "XYZ Fund has given 18% returns in the last 5 years" is permissible (it is factual past performance). Stating "Invest in XYZ Fund and earn 18% returns" is illegal (it implies future performance). Second, every advertisement must carry the standard disclaimer: "Mutual Fund investments are subject to market risks, read all scheme related documents carefully." For audio-visual media, this must be spoken clearly and not rushed. Third, past performance data must be shown for standard periods — 1 year, 3 years, 5 years, and since inception — as CAGR (Compounded Annual Growth Rate), and must include benchmark comparison. Fourth, star ratings and rankings from external agencies can be mentioned but must include the name of the rating agency, the period, and a disclaimer that ratings are not a guarantee. Fifth, and increasingly important in the digital age, social media posts by distributors are treated as advertisements and must comply with all the same rules. A WhatsApp forward claiming "best fund guaranteed 20% return" is as much a regulatory violation as a newspaper ad saying the same thing.