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AMFI has urged mutual fund distributors to renew their ARN at least 30 days prior to the expiry date.
This has come after AMFI saw instances where MFDs attend CPE just 2-3 days prior to the expiry of validity of ARN. AMFI said, “Of late, it has come to our notice distributors attend CPE just 2-3 days prior to expiry of validity of ARN and due to time taken by NISM in issuing certificate, they are unable to renew their ARN prior to expiry of validity of ARN, resulting in discontinuity in validity of ARN.”
MFDs should keep in mind that the entire renewal cycle takes over 15 working days, said AMFI. Citing an illustration, AMFI said:
- Exam – NISM issues certificate in around 4 working days
- CPE and eCPE – NISM issues CPE or eCPE certificate in around 15 working days
AMFI said, “Considering the time taken by NISM to issue certificate, MFDs are advised to attend CPE / pass NISM exam well ahead of expiry of validity of ARN, so that the ARN can be seamlessly renewed prior to expiry of ARN validity. You are requested to ensure to renew your ARN online through AMFI website at least 30 days before expiry of validity of ARN, in your own interest, to avoid any delay / break in ARN Validity and inconvenience.”
Currently, MFDs can renew their ARN six months prior to the expiry of validity period. Also, NISM allows MFDs to appear for CPE or eCPE 12 months prior to the expiry.
In its previous circular, AMFI has clarified that if a distributor applies for ARN renewal post the expiry of ARN, the ARN will be renewed from the date of receipt of his application in good order.
This essentially means that if you delay renewing your ARN by say 10 days, your trail commission generated during the 9 days from the expiry will be forfeited. In addition, the validity of ARN will be from date of application in good order to the expiry of CPE certificate.
Remember that business procured during the expired period or invalid ARN period will be shifted to direct plans. This means, SIP business of MFDs will go to direct plan during the expired period.
