What a scheme must disclose

The offer document tells an investor what a scheme intends; the ongoing disclosures tell them what it is actually doing, and the exam expects you to know that a fund’s duty to inform never stops. The most frequent is the NAV, computed and published every business day, so there is always a current price to transact at. Close behind is the Total Expense Ratio (TER), disclosed on the AMC and AMFI websites and updated whenever it changes, so the scheme’s ongoing cost is never hidden.

Then come the disclosures that reveal a scheme’s character and risk. The risk-o-meter is reviewed and disclosed every month, so a scheme’s risk reading stays current rather than frozen at launch. The portfolio is published periodically on the website, monthly for most schemes and more frequently for debt schemes, so an investor can see exactly what they own. And on a longer rhythm, financial results are published half-yearly, with an annual report (or its abridged summary) provided to unit-holders. Together these mean a diligent distributor can always check a fund’s holdings, cost and risk from mandatory, public sources, and advise from facts rather than a brochure, which is exactly the standard of care this exam is built to instil.