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In a clarification issued today, AMFI said that investment received from non-empanelled MFDs will go to direct plans.
This has come after SEBI saw instances where an AMC received business from a few non-empanelled MFDs. These MFDs got empanelled with the AMC on a later date, which is against the SEBI guidelines.
AMFI said, “Members are advised to ensure that before accepting any business from any MFD, such a MFD is duly empanelled with the AMC. Transactions received, if any, from / under the ARN of a non-empanelled MFD may be processed under direct plan, with prompt intimation to the non-empanelled MFD, and the investor.”
Further, AMFI said that SEBI has advised AMCs must ensure accepting business under regular plans only from empanelled MFDs. “Before accepting any business from any MFD, the AMC must ensure that the MFD is empanelled with the AMC, accepting any application/transaction (under Regular Plan) received under the ARN of an un-empanelled MFD and allowing some leeway / grace period to the MFD to complete the empanelment process would be in breach of the above SEBI directive. At the same time, rejecting the investor’s transaction would be incorrect and against the interest of the investor.”
The trade body further clarified that AMCs can accept business only from their empanelled distributors. It said, “Getting registered with AMFI and obtaining ARN does not automatically confer any right to the MFD to start selling mutual fund schemes of any mutual fund, unless and until the MFD is duly empanelled with the concerned AMC.”
