In line with its renewed vigour to check the rampant mis-selling, mutual funds will need to label and colour code their different schemes to indicate the risk to the capital invested by the customer.
Blue, yellow and brown will indicate low, medium and high risk respectively to the capital invested, says SEBI. Mutual Fund houses would label the scheme according to its nature (wealth creation, regular income), time horizon (short-/ medium- /long-term), investment goals followed by asset class and also the risk level using colour codes.
The label is to be disclosed in the scheme document, applications and all related advertisements. The order gets into effect for all schemes effective from July 1, 2013.