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One of our readers wrote to us with this query:
Since AMFI has asked all sole proprietors to necessarily obtain NISM certification, what if a sole proprietor is not in a position to appear for exam due to age, health conditions and so on?
Name withheld on request
Dear MFD,
In March 2022, AMFI has asked all sole proprietorship ARN holders to clear ‘NISM Series V-A Mutual Fund Distribution Certification Examination and obtain a fresh EUIN in sole proprietor’s name. This EUIN has to be mapped against the ARN of their sole proprietorship to continue distribution business by September 1, 2022 or the date of expiry of ARN, whichever is later.
So far, MFDs having sole proprietorship model could map EUIN of some other person or employee to the ARN of sole proprietorship. Basically, it was not mandatory for sole proprietors to clear NISM as they can ask employee or partner to do it for them. However this is no longer allowed.
AMFI has identified over 500 sole proprietors who do not have NISM certification and over 50 HUFs registered under proprietorship category despite the fact that HUF is a separate category. While sole proprietors will have to obtain NISM certification urgently, HUF can continue to work with the current requirement i.e. having one person/employee with NISM certification. However, HUF will have to pay ARN fee applicable to HUF and change its status.
To answer your question, while AMFI norms clearly say that your sole proprietor will have to obtain NISM certificate to continue business, you may write to AMFI to seek exemption on age or medical grounds. The power to give exemption is with AMFI ARN Committee.
We hope that we have addressed your query. Have a great day at work.
Regards,
Team Cafemutual
