Panel wants non-certified nominees to receive all
dues on commissions as also commissions on SIP investments.
According to a current SEBI rule – “the nominee
of individual distributor will receive trail brokerage/commission on business
done before the demise of the distributor holding ARN card. The nominee will
not be entitled for any brokerage/commission on SIP (Systematic Investment
Plan) instalments post demise of Distributor.” Therefore an IFA’s nominee who
does not have an ARN and NISM certification cannot receive trail commission on
the business acquired after the death of an IFA. Moreover, SEBI does not allow
any non AMFI certified broker to receive trail brokerage and this rule is
applicable even for IFA’s nominee.
The IFA fraternity has been seeking changes in this
rule, so that his/her non- AMFI certified nominee continues to receive further
trail till the time the investments are not redeemed. Sources in the know have confirmed to Cafemutual that the AMFI Committee
on Registration of Certified Distributors has now taken a clear stance and
recommended a modification to this rule.
Sources familiar with the development
told Cafemutual that the committee has written a letter to SEBI, requesting the regulator to change the rule and allow the
further trail commission to be paid to the individual nominee after the demise
of the IFA till the tenure of the investments even if the nominee is not an ARN
holder. The nominee should also be paid the due
upfront commission and trail commissions on SIP investments till the time the
investment is held, the AMFI committee has said.
“The nominee should
rightfully get the trail commission whether he has an AMFI certificate or not.
In insurance, the nominee receives the commissions till the end of the tenure
even if he is illiterate,” says Ramkant Mahawar, an IFA from Kolkata.
Manoj Garg, Managing Director, Simply Invest sums up the IFA
sentiment perfectly on this issue. “If the rule is changed, then an IFA’s
family will receive sustainable income even if he passes away. We will be glad
if SEBI reviews this regulation and carries out the needful changes,” says