Three changes by SEBI to help MF investors
Last Update Date: 05-10-2026
Published by freefincal
Abhishek Kumar's role: Wrote this article
Abhishek Kumar wrote this article explaining the three disclosure changes and how they help investors compare funds across fund houses on a like-for-like basis.
What Abhishek Kumar said
What did SEBI change in mutual fund half-yearly disclosures in November 2024?
Three things. Fund houses must now split each scheme's recurring expenses between its regular and direct plans instead of reporting one figure; half-yearly returns and yields against the benchmark, which a few fund houses already published voluntarily, become a standard disclosure for all; and the risk-o-meter gets fixed colour codes, with any change in a scheme's risk level shown beside the earlier level. Together they let an investor compare schemes across fund houses on the same footing.
Why does splitting expenses between regular and direct plans matter to me?
Until now most fund houses reported one expense number for the whole scheme, so an investor could not see what their own route into the fund was costing them on an ongoing basis. Showing the regular and direct costs separately fixes that, and read alongside the standardised return disclosure it explains why two plans of the same scheme end up with different outcomes. To me that is transparency in the useful sense: it is information that can change a decision.
What is the point of colour-coding the risk-o-meter?
It is mistake-proofing, the idea Japanese manufacturers call poka-yoke: design the display so an error is hard to make in the first place, the way a restaurant might use different plates for vegetarian and non-vegetarian dishes. Six risk levels, from Low to Very High, each in a fixed colour, are harder to misread than text alone. And because any change must be shown next to the previous level, an investor can see at a glance that a scheme has become riskier instead of discovering it later.
Do these changes make the market more efficient?
They move it a step closer. A regulator's aim is a market in which prices reflect everything that is known, and that depends on investors being able to see and compare information easily. Standard, like-for-like disclosures of cost, returns and risk across fund houses are a modest but real part of that. We are still a long way from an efficient market, and I would not overstate what one circular can do, but it is the right direction, taken one step at a time.
In our words, from what he said in the piece. General information, not personal advice.
More of Abhishek's views on money management
This guest article explains a SEBI circular of 5 November 2024 that changed half-yearly disclosures by mutual funds. Fund houses must split expenses between regular and direct plans, report returns and yields in a standard format, and use a fixed colour scheme for each level of the risk-o-meter.
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Three changes by SEBI to help MF investors