AMFI has allowed distributors working under sub broking model with national distributors to transfer their assets to own ARN.
So far, transfer of AUM from national distributor to sub distributor was not allowed as partial transaction of assets is not allowed in mutual funds. However, AMFI has revised the existing AUM transfer norms for distributors and allowed sub distributors to move assets from national distributors.
Remember that such a transfer is allowed only if sub distributor transfers his entire assets from national distributors to own ARN.
Sub distributors will have to inform their clients in writing via letter or email informing them about the change in ARN and the rationale behind it. In addition, sub distributors will have to highlight that if the clients have any objection for the change in distributor code, they must write to the respective AMCs directly. AMCs will have to effect changes to ARN within 15 days if they don't receive any objection from clients.
In case a client raises objection, sub distributors should immediately inform the AMC.
Also, sub distributors will have to submit transfer application to AMCs. The transfer application must have – 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.
The new distributor would get trail commission only after transfer of valid assets (KYC compliant accounts). Also, the new distributor will get trail commission on a prospective basis on the valid assets i.e. trail commission rate would be lower of commission on old ARN and new ARN.
