One of our readers wrote to us with this query:
Assume there are 2 partners operating a partnership distribution business. One of the partner has an ARN and the other holds a EUIN (not an ARN). How can the EUIN holder partner transfer the assets procured on the ARN in case of death of the ARN holder partner?
Regards,
Murtaza Amalneri
Dear Murtaza,
AMFI norms say that distributors can initiate change in ARN if they change their name or legal status such as proprietorship, LLP, private limited and so on.
Assuming that you are talking about yourself, you have two options – A.) Request AMFI to transfer ARN of your partner in your name (simple process) and B.) Obtain fresh ARN and request for transfer of AUM (somewhat cumbersome).
Request for name change to existing ARN
Partnership firms have two ARNs – Principal ARN in the name of partnership firm and secondary ARN in the name of a partner or an employee. Partnership firms can incorporate changes to the secondary ARN if a partner exits or dies.
However, before applying for name change, you will have to clear the NISM Mutual Fund Distributors Certification Examination. Once you clear this examination, you will be required to submit registration certification of your company, your PAN, address proof and bank details to request name change. In addition, you will have to undergo biometric KYDs.
In addition, you should immediately intimate AMFI through CAMS about the demise of your partner. CAMS will help you with the name change form, fees and documentation required like death certificate, your PAN, partnership firm deeds etc. to incorporate a name change to the ARN.
Obtain fresh ARN and request for transfer of AUM
Before transferring your assets, you will have to ensure that your new ARN is valid and KYD compliant.
For this, you will have to first surrender existing ARN of the partner and apply for fresh ARN.
You need to clear the NISM Mutual Fund Distributors Certification Examination. Once you clear this examination, you will be required to submit registration certification of your company, your PAN, address proof and bank details to apply for fresh ARN.
You will have to inform your clients in writing via letter or email informing them about the change in ARN and the rationale behind it along with the details of new distributor.
The transfer application must mention the reason for transfer supported by evidence and certification that letters/emails have been sent to all existing clients intimating them of change of distributor. You will have to attach a sample of such communication along with a list of clients.
On brokerage, trail commission rate for the new distributor will be in line with the trail commission rate of old distributor.