‘MFDs relocating to other countries must surrender ARN’

One of our readers wrote to us with this query:

I am a mutual fund distributor in India. I want to relocate to US and apply for green card there. Can I continue my MF distribution business if I hold a green card?

Shyam Maheshwary

Dear Shyam,

Thanks for writing to us.

AMFI norms say that only Indian mutual fund distributor can offer services to resident Indians. Since you are planning to obtain permanent residency outside of India, you will have to surrender your ARN.

While you can sell your assets to another Indian distributor before relocating, it will be considered voluntary exit if you do not transfer your assets before obtaining green card. In this case, AMFI will either shift your ARN code or give it to another MFD.

Once you are relocated, you can obtain new ARN as overseas distributor and offer services to NRI investors and foreigners.

Remember, you cannot onboard any resident Indian as your client. NRI MFDs can only source business from NRI investors and foreigners.

Going by your case, we recommend you to either sell your assets to other MFDs or see if you can spend more than 182 days in India to remain Indian resident.

Also, don’t get another residency status as this may also calls for discontinuation of Indian distribution business.

Regards,

Team Cafemutual