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One of our readers write to us with this query:
I would like to add nominees against my ARN. I want to understand if I can nominate through a centralized system. In addition, how many nominees can I appoint. Also, I want to know that if my nominee will receive trail commission in my absence.
Name withheld on request
Dear MFD,
Currently, MFDs have to submit a physical nomination form at the fund house level. There is no centralized and online system to make nomination against ARN. In addition, making changes in nominee details entails a complicated offline process.
Experts believe that centralized nomination may not be available anytime soon in the MF industry as the distributors and AMCs enter into a bilateral contract at the time of empanelment and the trade body like AMFI has no role to play here.
In terms of trail income, nominee/nominees are entitled to get trail income on assets built before the death of the MFDs. However, if the nominee wishes to get trail on all assets, she has to appear for NISM examination and obtain ARN within six months of death of the deceased MFD.
While you can nominate multiple nominees across fund houses, in our view, you should nominate only one person as the nominee against your ARN. According to the existing ARN transfer norms, all the nominees will have to obtain ARN to continue distribution business of the deceased MFD.
For instance, if an MFD appoints more than one nominee, let’s say, you appoint your son and your spouse as the nominees, the share of trail commission on assets built before the death of MFDs will be segregated among all nominees (between both) in the proportion given by the MFD. If the MFD has not mentioned any proportion, his assets will be divided equally among nominees.
In this case, both your son and spouse have to appear for NISM examination and obtain new ARN to continue your business.
Hope we have addressed your query.
Regards,
Team Cafemutual
