In a bid to caution people about the risks associated with a certain mutual fund product, SEBI is planning to introduce colour- coded mutual fund products to depict the level of risk involved with the instrument, according to a senior official of the capital market regulator.

Addressing a conference here, S V Muralidhar Rao, executive director , SEBI said that a SEBI subcommittee had been set up to deal with the introduction of product labelling for MF schemes.

He also said that SEBI was working on a long-term policy for the MF sector.

Mr Rao felt that sound business models, better distribution networks and increased investor awareness about mutual funds could propel a sustainable growth path for the industry, which now commands an asset under management of Rs 7.5 lakh crore. Of the 45 million folios, 97 per cent was with retail investors.

D. Chatterjee, the managing director and CEO of SBI Funds Management Pvt Ltd felt that for the sustainability of AUM, the MF industry should earn the trust of investors.

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