NISM has awarded certifications to around 1000 distributors who comply with SEBI’s 10 year criteria.
SEBI has communicated to NISM that new cadre of distributors can be only receive certification if they meet the criteria of ten years of experience. AMFI and NISM had sought clarity from SEBI regarding the applicability of ‘10 years of experience’ criteria for new cadre of distributors.
It is learnt that while fund houses have started the process of enrolling the new cadre of distributors, not all the new cadre distributors proposed to be enrolled meet the 10 year experience. The new cadre of distributors falls broadly in two categories; the first category consists of people like postal agents, retired government and semi-government officials and the second category of bank correspondents and insurance agents. Fund officials say that retired individuals naturally fit the 10 year criteria but bank correspondents and insurance agents do not. Fund officials say that the first category of distributors have received their certifications from NISM.
An NISM official told Cafemutual that SEBI has not changed its stance on relaxing the experience norm to below ten years. So far NISM has awarded certifications to around 1000 new cadre of distributors who qualify as per SEBI’s rule.
AMFI had earlier relaxed the 10 year criteria for the new cadre of distributors to five years and subsequently to zero.
SEBI’s September 2012 circular states that AMCs and AMFI can notify other categories of distributors from time to time. AMFI had thus relaxed the experience criteria to five and subsequently to zero for bank correspondents. However, NISM did not give certification to distributors if they did not meet the 10 year experience criteria, sticking to SEBI’s rule. Subsequently, the matter was taken up with SEBI.
“A new cadre of distributors, such as 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 other similar persons (such as Bank correspondents) as may be notified by AMFI/AMC from time to time, shall be allowed to sell units of simple and performing mutual fund schemes.” states the SEBI circular.
Fund officials say that they can now enroll only a limited number of distributors since the rule has not been relaxed. “We have trained many distributors across India. We are struck with some of them as they do not fit the ten year criteria,” said an official from a public sector fund house.
