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Expressing discontent over the AMFI’s new ARN renewal norms, Delhi based All Mutual Fund Distributors Welfare Association (AMDWA) has sent a letter to AMFI requesting the trade body to reconsider its decision on lifetime forfeiture of trail commission for non-renewal of ARN within three months.
According to the new ARN renewal norms, trail commission of AUM built before the expiry date of ARN will be forfeited completely, if MFDs renew their ARN after three months of the date of the expiry.
Complete forfeiture of trail commission for non-renewal of ARN is very harsh on MFDs, said AMDWA. The association requested AMFI to review this clause as MFDs work very hard to bring in new investors to the MF industry.
The association also urged AMFI that it should consider revising the timeline to renew ARN from 3 months to at least 6 months.
At times, an MFD may not be in a position to renew his/her ARN on time because of health issues, family matters and so on. Three months is very short time for an MFD to renew ARN under such circumstances, said the association.
In addition, AMDWA has requested AMFI to reintroduce physical mode to renew ARN. Sanjay Bhan, President, AMFWA said, “MFDs are spread across the country. Also, there are MFDs who do not have access to online banking facility and there can be a situation when the authority bans internet access, Hence, AMFI should consider restarting physical facility for MFDs to renew ARNs.”
