While the pandemic has taken so many lives, the MF industry too has lost a few gems from the distribution community as well.
Over the past few weeks, we have received many queries on the AUM transfer norms of AMFI. Most of these queries are about transfer of AUM due to death of a distributor.
To address these queries, we have reproduced our previous article to give you gist of the revised AMFI guidelines effective August 1, 2020.
If transfer of AUM is due to death of a distributor
In order to transfer AUM of a deceased MF distributor to the ARN of nominee or legal heir, the ARN of deceased distributor has to be valid on the date of demise and his trail commission not under suspension for any reason.
In addition, the nominee or legal heir must have a valid ARN and be KYD compliant as on the date of request of such a transfer. The new distributor will have to submit his annual declaration of self-certification (where applicable) due as on the date of request of transfer of AUM.
Here are other key points to remember:
- Only valid assets can be transferred to the legal heir or nominee
- The new distributor has to submit an application for cancellation of ARN of deceased distributor to CAMS-AMFI unit within 6 months of date of demise. CAMS will send a confirmation to the new distribution on receipt of such request
- CAMS will have to cancel the ARN and intimate all AMCs and RTAs
- Meanwhile, the new distributors will have to individually approach all empanelled AMCs and make an application for transfer of assets to his ARN
- The new distributors will have to intimate all clients of change in ARN through letter or email. He 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
- 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 list of clients with PAN and folio numbers
- There will be no need to accept written consent from clients on such transfers
- AMCs will have to effect changes to ARN after cooling period of 15 days. In case of any objection, AMCs can withhold such a transfer
