Despite making it mandatory, EUINs have not been quoted in 15% of transactions received by AMCs since June 2013.
Fund houses have withheld commissions on transactions where the recently introduced Employee Unique Identity Number (EUINs) have not been mentioned in applications from June 01, 2013. According to rough industry estimates, EUINs are missing in 15% to 18% of transactions received by AMCs every month since June. Quoting EUIN is mandatory on ‘advisory’ transactions from June 2013. Distributors don’t need to mention EUIN on ‘execution only’ transactions though.
According to fund officials, CAMS has issued close to 80,000 EUINs so far. Fund officials say that EUINs are missing in transactions originating from large distributors who have enrolled many sub-brokers. They say that almost all IFAs have received their EUINs now. It takes about a month to generate EUIN.
EUIN is mandatory to be mentioned in transactions like purchases, switches, registrations of SIP / STP / trigger STP / dividend sweep plans. Only overseas distributors are exempted from getting EUIN.
If distributors fail to mention EUIN they have to obtain a declaration (“I/We hereby confirm that the EUIN box has been intentionally left blank by me/us as this is an “execution-only” transaction without any interaction or advice by the employee/relationship manager/sales person of the above distributor or notwithstanding the advice of in-appropriateness, if any, provided by the employee/relationship manager/sales person of the distributor and the distributor has not charged any advisory fees on this transaction”) and submit it to registrar or the AMC within 90 days. If they fail to do so within 90 days, AMCs forfeit the commissions permanently. If any of your employee or sub-broker has not mentioned EUIN from June 01 then you still have a chance to send EUIN to CAMS or the AMC.
“Only 1% - 2% of our sub-brokers have not received EUINs. Mostly, people who have recently renewed their ARN have not received EUINs. In our case, majority of the transactions are correct but R&Ts have flagged them as incorrect. You have to either mention EUIN or get a declaration from the investor that the transaction is ‘execution only’. We have done that but even in such cases the application is flagged as incorrect,” says Shirish Patel, CEO, Prudent Corporate Advisory Services.
The database of all EUIN holders is being maintained by AMFI-unit of CAMS. Quoting EUIN will be mandatory for transactions originating from SMS, stock exchange platform, ATM, call center from August 2013.
