mutual fund distributors are now not required to obtain NISM certification and
are also not required to comply with KYD process.
order to remove the entry barriers for getting foreign investments, market
regulator SEBI has done away with know your distributor (KYD) norms for
overseas mutual fund distributors. It has also said that overseas mutual fund
distributors need not pass the NISM certification for selling mutual funds.
has stated that AMCs are required to ensure that distributors are compliant
with extant laws where they operate at the time of empanelling them.
has written to AMFI on July 5, 2012 advising it not to insist on KYD for overseas
distributors. However, the overseas distributors have to comply with the extant
laws of jurisdictions where they carry out their operations.
had to visit India for KYD. SEBI wanted to remove entry barriers and bolster NRIs
and QFI flow into Indian markets. Overseas distributors who are regulated under
Financial Services Authority (FSA) need not register with AMFI or NISM,” says a
marketing head of a leading fund house.
rule came into effect with September 1, 2010. The KYD norms require in-person verification
of distributors and bio-metric process. CAMS is responsible for processing the
KYD data. As per industry estimates there are around 40,000 KYD compliant
distributors. It is mandatory for Indian mutual fund distributors to be KYD