SEBI/HO/IMD/IMD -PoD -2/P/CIR/2025/6 — THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

CIRCULAR SEBI/HO/IMD/IMD -PoD -2/P/CIR/2025/6 To All Mutual Funds All Asset Management Companies (AMCs) All Trustee Companies/ Boards of Trustees of Mutual Funds Association of Mutual Funds in India (AMFI) Dear Sir/Madam, Subject: Disclosure of Risk adjusted Return - Information Ratio (IR) for Mutual Fund Schemes . The extant provisions of the SEBI (Mutual Funds) Regulations, 1996 (hereinafter referred to as "MF Regulations") and Master Circular specified thereunder inter alia mandate filing of periodic information regarding schemes' performance by AMCs. Apart from the same , appropriate disclosures pertaining to scheme returns are also made voluntarily, in various other documents / disclosures by AMCs. In addition to the above, a need has been felt to mandate disclosure of the "Risk Adjusted Return" (RAR) , which shall represent a more holistic measure of a scheme's performance . Considering the significance of volatility of performance in determining the suitability of MF schemes, Information Ratio (IR) is an established financial ratio to measure the RAR of any scheme portfolio. It is often used as a measure of a portfolio manager's level of skill and ability to generate excess returns, relative to a benchmark and also attempts to identify the consistency of the performance by incorporating standard deviation/risk factor into the calculation. In order to bring more transparency in disclosures made by AMCs and aid better decision making by investors, proposed disclosure of IR as a financial metric to measure the RAR of a scheme portfolio , was placed for public consultation and deliberated in Mutual Funds Advisory Committee (MFAC). Based on the recommendation of MFAC and analysis of public feedback , the following has been decided: January 17 , 2025 A. Disclosure of I