Responding to AMFI, SEBI has clarified that non-individual RIAs will have to recommend regular plans only to clients opting for distribution services. Since regular plans capture ARN, the data feeding automatically happens, said SEBI.
SEBI further clarified that MFDs cannot deal in direct plans. “If any entity is acting as a mutual fund distributor for a particular client, then he cannot deal in direct plans for such a client and thus, the question of data feed of such plans does not arise.”
For clients who opt for advisory services, RIAs will have recommend direct option only along with their code to receive feeds. Such RIAs are not allowed to charge commission from advisory clients.
RIAs offering distribution services should have valid ARN and EUIN to distribute regular plans and receive transaction feeds and commission.
