The association has submitted a white paper to AMFI in which it has flagged 35 issues faced by distributors.
Gurpreet Singh, Principal Consultant of Financial Intermediaries Association of India (FIAI) told Cafemutual that the association has recently submitted a white paper to AMFI in which it has raised a host of operational issues faced by distributors.
Among the various issues, it has sought clarity on the implementation of employee unique identity number (EUIN) for transactions originating from SMS, online, ATM, etc. Quoting EUIN has become mandatory on transactions done through SMS, stock exchange platform, ATMs, call center, from August 01, 2013. AMCs withhold commissions and transaction charges on applications where EUIN has not been mentioned.
FIAI has also suggested AMFI that an online system should be developed where distributors can track the status of their EUIN and ARN. It takes about 15 days to get an ARN license from AMFI and about 10 days to get EUIN.
In a bid to attract more IFAs in the industry, AMFI has waived off ARN fee for those who register for the first time under the individual category till September 2013. FIAI has requested AMFI to further extend this waiver period till March 2014.
The association has requested that there should be uniformity in the way AMCs pay commissions on SIPs. Gurpreet said that some AMCs pay commission from the date of SIP registration while some pay when the transaction is initiated.
Besides, the association has also communicated certain issues pertaining to KYC, KYC Registration Agency (KRA) and AUM transfer.
Some of the issues raised by FIAI are:
· No switch facility available on stock exchanges
· Need to have uniformity in how applications are tagged as B-15 and T-15 across R&Ts and AMCs
· Need of a clawback report by AMCs which will track the commission paid and clawed back.
Formed in 2009, FIAI currently has 15 members which include national distributors, banks and wealth management firms. Its members are Bajaj Capital, Karvy, NJ India, ING Financial Services, Capital First, JM Financial, Axis Capital, SPA Capital, Standard Chartered Bank, Prudent and IIFL Private Wealth Management, Aditya Birla Money, Reliance Money Solutions, Geojit BNP Paribas and Motilal Oswal Wealth Management. Soon, 5 to 10 more distributors are expected to join FIAI.
