Intermediaries play a pivotal andvaluable role in promoting sale of Mutual Funds. It is therefore vital thatthose engaged in selling Mutual Funds have the highest standards of knowledgeattitude and ethics. Their well being, quality orientation and ways of doingbusiness will have a significant impact on how the Mutual Fund Industrydevelops in the future.
AMFI introduced the process to registerthe intermediaries who have passed the certification test as AMFI Registered Mutual Fund Distributor (ARMFD), thus laying the foundation for an organizedindustry and allotting a unique code-AMFI Registration Number (ARN)along withan identity card. SEBI recognizing the importance of this initiative taken byAMFI had made Registration with AMFI after passing AMFI Certification Testcompulsory for intermediaries. SEBI has clarified that after obtainingcertification from NISM as per changed mandate (w.e.f. June 01, 2010), therequirement of registration with AMFI, in terms of its circular dated November28, 2002 would continue.
As such, all NISM CertifiedIntermediaries engaged in marketing and selling of Mutual Fund schemes arerequired to be registered with AMFI after passing NISM Certification Test. Minimum age for obtaining ARN is 18 years. TheMutual Funds will not be able to deal with intermediaries who are not registeredwith AMFI and obtained ARN.
In terms of SEBI Circulardated September 13, 2012, "AMFI shall create a unique identity number ofthe employee/ relationship manager/ sales person of the distributor interactingwith the investor for the sale of mutual fund products, in addition to the AMFIRegistration Number (ARN) of the distributor.The application form for mutualfund schemes shall have provision for disclosing the unique identity number ofsuch sales personnel along with the ARN of the distributor."
The AMFI Registration Number (ARN) has been introduced as the unique code, which identifies the intermediary as ARMFD.
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 ARMFD.
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.
Securities and Exchange Board of India (SEBI) has advised AMFI to review the existing registration procedure for Mutual Fund Distributors and initiate necessary action to strengthen the same to ensure correctness of information furnished in the registration application and also to have in person verification of the ARN holders.
AMFI has therefore decided to introduce Know Your Distributor (KYD) process for the Mutual Fund distributors with effect from September 1, 2010. The KYD procedure consists of document verification and Bio-metric process. The distributor is therefore required to apply for KYD simultaneously along with application for registration of ARN. Please click here for detailed process note and KYD application form for
AMFI has engaged the services of Computer Age Management Services Ltd. (CAMS) to carry out the KYD process through their centres referred as "CAMS POS".
Click here to get the list of CAMS-POS