Intermediaries play a pivotal and valuable role in promoting sale of Mutual Funds. It is therefore vital that those engaged in selling Mutual Funds have the highest standards of knowledge attitude and ethics. Their well being, quality orientation and ways of doing business will have a significant impact on how the Mutual Fund Industry develops in the future.
AMFI introduced the process to register the intermediaries who have passed the certification test as AMFI Registered Mutual Fund Advisors (ARMFA), thus laying the foundation for an organized industry and allotting a unique code-AMFI Registration Number (ARN) along with an identity card. SEBI recognizing the importance of this initiative taken by AMFI had made Registration with AMFI after passing AMFI Certification Test compulsory for intermediaries. SEBI has clarified that after obtaining certification from NISM as per changed mandate, the requirement of registration with AMFI, in terms of its circular dated November 28, 2002 would continue.
As such, all AMFI/ NISM Certified Intermediaries engaged in marketing and selling of Mutual Fund schemes are required to be registered with AMFI after passing AMFI/ NISM Certification Test. The Mutual Funds will not be able to deal with intermediaries who are not registered with AMFI and obtained ARN.
In terms of SEBI Circular dated September 13, 2012, “AMFI shall create a unique identity number of the employee/ relationship manager/ sales person of the distributor interacting with the investor for the sale of mutual fund products, in addition to the AMFI Registration Number (ARN) of the distributor. The application form for mutual fund schemes shall have provision for disclosing the unique identity number of such sales personnel along with the ARN of the distributor.”
EMPLOYEES OF ARMFA
In terms above mentioned notification and SEBI circulars, employees/ relationship manager/ sales person of ARN holders who are engaged in marketing of Mutual Funds Products, are also required to pass test and register with AMFI, under ARN of the employer.
AMFI, has allotted Employee Unique Identity Number (EUIN) to all the employees, who are registered with AMFI and having valid registration. A photo identity card bearing EUIN is also being issued to the existing corporate employees after they surrender existing corporate employee ARN card issued to them.
The employees would be henceforth issued EUIN card containing EUIN, name, photo and validity period of EUIN.
The said EUIN is required to be mentioned on the Mutual Fund scheme application forms with effect from January 1, 2013.
EUIN issued to the employees would remain same, even if they change their employment and join some other ARN holder for selling/ marketing Mutual Fund products. However, for effecting such change in AMFI’s records, the employees are required to submit duly filled in form for mapping EUIN as stated here under.
The employees are required to fill up the form for mapping EUIN in the following scenarios and submit the duly filled in and signed form to CAMS along with required documents.
- To dissociate from present ARN mapping for doing own business.
- To change the EUIN mapping from present ARN to another ARN (in case of change of employment)
- To cancel EUIN.
The AMFI Registration Number (ARN) has been introduced as the unique code, which identifies the intermediary as ARMFA.
- ARN is a unique number allotted to:
- Individual agents, brokers, and other intermediaries engaged in selling Mutual Funds, having passed the AMFI/NISM Certification Test and senior
citizens having attended Continuing Professional Education (CPE) and agreeing to abide by the code of conduct and other undertakings as mentioned in the application form.
- Corporates engaged in the business of selling Mutual Funds, which apply to AMFI and agree to abide by the code of conduct and other undertakings as mentioned in the application form.
- A photo identity card bearing unique ARN, address, his/ her name, photo and the validity period of ARN, would be issued to individual applicants and senior citizens whereas Certificate of Registration bearing unique ARN, name of the corporate and the validity period of ARN would be issued to Corporate applicants.
- Employees would be issued EUIN card with their EUIN, his/ her name, photo and validity period of EUIN.
- The application for registration of corporate bodies should compulsorily be accompanied by the application for registration of corporate employee.
- Passing certificate issued by National Institute of Securities Market (NISM) in respect of 'NISM - Series V-A. Mutual Fund Distribution Examination' has validity period of three years. Also, the CPE certificate issued by NISM is valid for three years. Accordingly, ARN issued to individual, senior citizens and EUIN issued to employees against such certificates shall have validity period from the date of submission of ARN registration application up to the validity date mentioned on the passing certificate/ CPE certificate, if the application is in order. In case of corporate entities, validity period for Certificate of Registration issued is 3 years.
- No distributor shall hold more than one ARN card/ Certificate of Registration
- After obtaining ARN, the intermediaries should approach the AMCs for empanelment and they can canvass Mutual Fund business of the respective AMCs only after empanelling with them.
- Registered intermediaries can be de-registered as the ultimate censure, for the following reasons:
- Violation of the code of conduct.
- Being indicted for serious offences by a Regulatory Authority/ Judicial Authority.
- Complaints of gross negligence upheld by a consumer court.
In order to promote best practices and ethical standards in the business of sale of Mutual Fund schemes, AMFI has formulated broad guidelines and norms including a code of conduct for the intermediaries, which will be applicable to ARMFA.
AMFI believes that a sincere endeavor to adhere to the guidelines and the code would help promote best and healthy practices in the area of sales and marketing which would ultimately benefit all concerned - the investor, the intermediary and the industry as a whole.
PROCEDURE FOR OBTAINING REGISTRATION
AMFI has authorized M/s Computer Age Management Services Pvt. Ltd. (CAMS) to act as processing agent on its behalf for the purpose of ARN.
For registering with AMFI, Intermediaries are required to apply in the prescribed form. The form can be obtained from the office of AMFI or any office of CAMS. Alternatively the form can also be downloaded from AMFI's website www.amfiindia.com
Application forms must be submitted along with KYD acknowledgement or along with KYD application form in person, in case KYD process is not completed, to the office of CAMS (CAMS-POS). The details of fees and documents required to be submitted in respect of various categories of intermediaries is indicated in the below mentioned table:-