SEBI’s decision to rope in more distributors should help increase the penetration of mutual funds.
NISM has launched the much awaited one day certification for the new cadre of distributors. These distributors include postal agents, retired government and semi-government officials (class III and above or equivalent) with a service of at least 10 years, retired teachers with a service of at least 10 years, retired bank officers with a service of at least 10 years, and bank correspondents.
People qualifying as new cadre of distributors can either pass the existing NISM-Series-V-B: Mutual Fund Foundation Certification Examination or complete a one day NISM Mutual Fund Foundation CPE Program. These certificates will be valid for three years.
For more details on NISM-Series-V-B: Mutual Fund Foundation Certification Examination, click here.
SEBI’s decision to rope in more distributors to penetrate mutual funds has brought a fresh ray of hope for AMCs who have seen their distribution force shrinking after a host of regulatory changes, particularly the entry load ban. In order to incentivize distributors, SEBI recently allowed them to get a transaction fee of Rs 100/150. This step met with a limited success as not many distributors have opted in for transaction charge.
Currently there are some 50,000 odd KYD compliant distributors. Being KYD compliant is mandatory for all mutual fund distributors. AMCs, meanwhile, are devising their own strategies to identify and enroll these new distributors. In an interview with Cafemutual, A Balasubramanian had said his AMC is looking at ways to empanel new distributors. “We are also looking at empanelling more distributors with us. We will focus on roping in distributors from smaller towns who can sell simple products.”
These new cadre of distributors will only be allowed to sell diversified equity schemes, fixed maturity plans (FMPs) and index schemes which have returns equal to or better than their scheme benchmark returns during each of the last three years, as specified by SEBI.
To read the SEBI circular, click here
Do you think the new cadre of distributors will help revive the mutual fund industry? Let us know.
