‘MFDs can use different names in ARN and website provided it complies with AMFI norms’

One of our readers wrote to us with this query:

Dear Team Cafemutual,

At the onset, I wish to congratulate the whole team of Cafemutual for creating such knowledgeable content, which is so relevant for the MF industry. It has actually  become a morning habit to read the newsletters and get updated through Cafemutual.

I have a query. Can a MFD have different names in ARN and website? If yes, what are things that should be kept in mind?

Manish Saluja

Saluja Finserve, Delhi

Dear Manish,

Thanks for writing to us.

Yes, you can have different names for your website or App. Currently, there is no norm, which stops MFDs from using different names for their website.

However, the name of the website should comply with the nomenclature norms of AMFI. This means, you cannot use the word adviser, financial advisers, investment adviser and so on.

In the past,  AMFI has suspended ARNs for not removing terms like adviser, financial adviser, investment adviser and so on from the name of their business.

SEBI norms explicitly say that individuals other than SEBI registered investment advisor (MFDs in this case) cannot use words like consultant or coach.

Here are other key things that you should keep in mind before finalizing the name of the website.

• Apart from nomenclature, your website name should not reflect or create an impression that you perform a role of IFA/adviser/wealth manager
• You will have to clearly mention that you are acting as an MFD and dealing with distribution of mutual funds in your website
• MFDs can use words like financial services, capital services and investment services
• In addition, while you can use words like wealth and investment on standalone basis, you cannot use these words in combination like wealth manager and investment management
• The name of the website should not entice people. It should not indicate that you make people wealthier, create wealth or help them earn attractive returns from mutual funds
• If you want to facilitate online transactions on your website, you will have to explicitly give a disclaimer that ‘Regular plans involve payment of commission to MFDs’
• In addition, MFDs facilitating digital transactions should prominently display their commission structure from different competing schemes across fund houses through a hyperlink
• Remember, MFDs have to carry a tagline ‘AMFI registered Mutual Fund Distributor’ along with their name or website name
• The tagline has to be carried in a clear and legible font of at least font size 12 across all forms of communication
• MFDs should display their name and tagline in a clear and legible font in all forms of communication i.e. website, mobile app, printed or electronic materials, business card, sign board and so on

You may write to AMFI at contact@amfiindia.com before finalizing the name of the website or visit distributor helpdesk of CAMS and KFintech.