The struggle of family members of deceased MFDs to claim trail commission has brought nomination issue to the fore. MFDs, both at the individual and association level have voiced their concerns regarding the existing nomination process.
Currently, MFDS have to submit a physical nomination form at fund house level. There is no centralized and online system to make nomination against ARN. Also, making changes in nominee details entails a complicated offline process.
In the first week of June, the north India based MFD association — All Mutual Fund Distributor Welfare Association (AMDwA) wrote to AMFI asking for a centralised online process for nominee registration and updation of details.
"Our basic stand is that there should be a centralised online and offline process for registering and changing nominee details," said Lovey Mehra, President, AMDwA. “The process can be centralised by linking nominee details to the ARN instead of AMC contracts,” he added.
Babu Krishnamoorthy, President, IFA Galaxy also echoed similar views. He said that an online process will go a long way to make the process easier. "Most MFDs deal with at least 10-15 AMCs. In order to change nominee, an MFD has to get physical forms of all the AMCs, sign it and submit it the respective RMs. This is a troublesome process especially in times of covid. An online process can be a big help," he said.
AMFI Chairman Nilesh Shah, when contacted for his view on the matter, said the association’s ARN committee will look into it.
MFDs also took up the matter with AMFI at individual level.
Addressing a tweet to AMFI and its chairman Nilesh Shah, MFD Manish Salluja said, "Respected sir, a lot of MFDs have lost their lives in recent times due to covid. I would like to request you to make nomination process simpler for MFDs. One application to any RTA should be acceptable rather than MFD approaching each AMC individually." Shah responded to the tweet saying: "Sure we will look at this suggestion".
MFDs' recommendations
Lovey Mehra and Babu Krishnamoorthy said the existing AMFI portal which is used for annual due diligence can be used for nominee registrations too.
Mehra said the portal can also serve as a platform to check nominee details at one place. "There is no standard system wherein MFDs can get to see their nomination details. Some put it in the commission statement, some do not," he stated.
