New cadre of distributors need not go through KYD process.
AMFI has relaxed AMFI Registration Number (ARN) process for the new cadre of distributors. These distributors will be exempted from complying with Know Your Distributor (KYD) norms.
AMFI has also kept the ARN registration fee minimal at Rs. 1500 and Rs. 750 for renewal.
Further, AMFI has also done away with the requirement of procuring at least 12 investors after a distributor gets empanelled with AMC for new cadre of distributors.
AMFI circular issued on July 18 2008 states “All individual ARMFA obtaining empanelment with an AMC would be required to have at least 12 investors with the empanelling AMC, within one year of empanelment. Failing this, the ARMFA would have to provide an undertaking to the AMC that it services at least 25 investors across all mutual funds. Failing both the above, the ARMFA would not be entitled to receive brokerage from the AMC on the mobilization done by it during the subsequent year, until it complies with the above.”
These new cadre of distributors will have to clear Mutual Fund Foundation Certification Examination or attending Mutual Fund Foundation CPE Program, specially designed by NISM for new cadre of distributors.
The new cadre of distributors will be allowed to canvass only diversified equity schemes, fixed maturity plans (FMPs) and index schemes having returns equal to or better than their scheme benchmark returns during each of the last three years.
Recently, AMFI has also waived the ARN registration fee for first time distributors in the categories of Individuals (including senior citizen) and new cadre of Distributors during the period from 1st February, 2013 to 30th June, 2013. This means that the new cadre of distributors can obtain ARN license free of cost till June 2013.
Who qualifies as new cadre of distributors?
-
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
-
Intermediaries / Agents engaged in distribution of financial products e.g. insurance agent, FD agent, National Savings Scheme products, PPF, etc. registered with any other Financial Services Regulator
-
Business correspondents appointed by Banks
Click here to read the entire registration process.
Click here to read AMFI circular dated July 18 2008.
Do you think these measures will help attract more IFAs in the industry? Let us know.
