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One of our readers approached us with this query.
I have received a show cause notice from AMFI for a WhatsApp post. I have been given 7 days to reply to the post. I want to know if MFDs are not allowed to express their thoughts about AMCs on social media. These views are completely personal.
Name withheld on request
Dear MFD,
You have to be very careful on what you post or put on social media. As an AMFI registered mutual fund distributor, you cannot spread mis-leading information through any medium of communication including social media.
AMFI code of conduct explicitly says:
- MFDs should not make any false or defamatory statement about AMC, AMFI, other MFDs and MF schemes
- MFDs should maintain professional decorum and should not participate in transmitting untrue statement or rumours
- MFDs should use social media responsibly with respect to content standards and authenticity
The code of conduct reads, “MFDs, shall refrain from making false or defamatory statements about any AMC, AMFI, Mutual Fund schemes or other MFDs in any private or public forum (including chat groups, social media, print or electronic press, conferences etc.). MFDs shall maintain professional decorum, provide fair and balanced perspective and not participate in transmitting untrue statements or rumors so as to malign any AMC or Mutual Fund scheme or bring disrepute to any AMC, AMFI or the Mutual Fund industry. Any written or oral communication should be based on facts and be presented in an unbiased manner so as not to mislead the public.”
You can read the code of conduct by clicking here.
In your case, you should immediately submit your response to AMFI. It is within the powers of the ARN committee to pardon you or condone your action or issue a warning or temporarily suspend your ARN. Ideally, you should request the ARN committee not to take stringent action.
We urge all MFDs to exercise caution and use social media or any other means of communication responsibly.
Hope we have addressed your query.
