One of our readers wrote to us with this query:
An employee has started doing business in his own ARN without my knowledge. In fact, he took away many prospects, which I got through referrals and IAPs. Now, I would like to understand if AMFI could cancel his ARN for violation of code of conduct. Is there any way to lodge forgery complaints against the employee?
The MFD requested anonymity.
Dear MFD,
First, it is important to do due diligence on your employees before hiring them. In addition, your employees who are into sales, relationship management or client facing job which involves talking or meeting clients must obtain employee unique identify number (EUIN).
In 2013, SEBI came out with EUIN to detect mis-selling. EUIN aims to make employees of distribution firms responsible for their conduct.
EUIN remains unchanged even if the employee switches his job. For distributors, quoting EUIN is mandatory. Today, all MF application forms capture EUIN along with ARN code and the sub broker code.
Coming back, if this employee would had EUIN, you could have mapped all business procured by him with your ARN.
In the absence of EUIN, AMFI may not consider this a violation of code of conduct unless he has forged documents of your existing clients.
In case you are not satisfied, you can take legal counsel on how to proceed.