EUIN remediation period will remain 30 days as opposed to seven days proposed earlier by AMFI.
In a major relief to IFAs, AMFI has decided to keep the EUIN remediation period as 30 days instead of seven days.
Earlier, AMFI had issued circular in which it stated that EUIN remediation period will be brought down to seven days. This was protested by distributors as seven days were too less and they could lose commission. Distributors associations like IFA Galaxy and Financial Intermediaries Association of India (FIAI) had requested to AMFI to consider relaxing the unique identification (EUIN) rules.
EUIN is a unique seven digit alpha numeric number assigned to the employees of distributors which was introduced by SEBI to tackle the menace of mis-selling. If distributors fail to quote EUIN within the remediation period their commissions were forfeited. Now, distributors have sufficient time (30 days) to remediate EUIN.
“We are thankful to AMFI for addressing our concerns. It was not possible for IFAs to remediate EUIN in seven days. It’s a major relief for us,” said A K Narayan, President, IFA Galaxy.
Through its best practices circular, AMFI has said that that forfeiture of commissions for EUIN non-compliance will be applicable to transactions on or from April 01, 2014. It has asked AMCs to release commissions on transactions up to March 2014 which are EUIN compliant.
Commissions are withheld for 30 days within which distributors have to furnish EUIN. The commissions are released by fund houses if distributors remediate it within this period.
Quoting EUIN in application forms became mandatory from June 01, 2013 for purchases, switch, registration of SIP / STP / DTP / trigger.
Distributors have to get EUIN for all employees who advice clients. If there is no interaction between the employee of the distributor with respect to a particular transaction (execution only), distributors have to get a declaration signed by the investor. (“I/We hereby confirm that the EUIN box has been intentionally left blank by me/us as this transaction is executed without any interaction or advice by the employee/relationship manager/sales person of the above distributor/sub broker or notwithstanding the advice of in-appropriateness, if any, provided by the employee/relationship manager/sales person of the distributor/sub broker.”) If the distributors fail to furnish this declaration to the AMC within the remediation period, their commissions are forfeited permanently.
