‘There is no regulation which stops your children from working with an AMC/insurer’

One of our readers wrote to us with this query:

Dear Cafemutual,

I am an individual mutual fund distributor. My son, who was doing MBA got placement in an AMC. Now, I would like to understand if my son can work with this AMC as I am associated with the AMC as a mutual fund distributor. Request you to guide me on this issue.

Name withheld on request

Dear MFD,

Thanks for writing to us.

There is no regulation or guideline which stops children of distributors from working with an AMC or any financial services company like banks, insurance companies and so on.  

This means that your son can work with the AMC. However, your son will have to give a declaration to the respective AMC that his father is the empanelled mutual fund distributor.

While there is no standard guideline to deal with these cases, AMCs may either you put in the list of their associate distributors so that you continue your business with them or dis-empanel you for incremental business to avoid any conflict of interest. It is largely at the discretion of the fund house.

Also, it also depends on the job role. For instance, if your son works in operational team, there is no requirement to exercise additional scrutiny. However, if he works in investment management team or sales team, the AMC will do stringent scrutiny.

Hope we have addressed your query.

Regards,

Team Cafemutual