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In an effort to streamline the process of transfer of MF units in case of demise of MFDs, AMFI has issued standard guidelines for nominees and legal heirs of the deceased MFD to simplify the transmission process.
According to the new norms, the nominee or legal heir has to immediately submit a written intimation to CAMS – AMFI unit informing about the demise of the MFD. Such a communication should accompany ARN and a true copy of death certificate attested by notary or gazetted officer.
The nominee who wants to continue the distribution business will have to obtain valid ARN by appearing for NISM Examination. Also, the nominee has to empanel with all AMCs in which the deceased MFD had a business.
Further, the nominee or legal heir must have a valid ARN and be KYD compliant as on the date of request of such a transfer. The new distributor will have to submit his annual declaration of self-certification (where applicable) due as on the date of request of transfer of AUM.
Here are other key points to remember:
- Only valid assets can be transferred to the legal heir or nominee
- The new distributor has to apply for cancellation of ARN of deceased distributor to CAMS-AMFI unit within 6 months of date of demise. CAMS will send a confirmation to the new distribution on receipt of such request
- CAMS will have to cancel the ARN and intimate all AMCs and RTAs
- The new distributors will have to intimate all clients of change in ARN due to demise of the distributor through letter or email. You can download the standard format here
- The new distributor has to highlight that if the clients have any objection for the change in distributor code, they must write to the respective AMCs and RTAs directly within 15 days
- Meanwhile, the new distributor needs to submit an AMC wise application for transfer of AUM (download the standard format here) and the respective RTA with a covering letter (download the standard format here)
- The transfer application must have reason for transfer supported by evidence and certification that letters/emails have been sent to all existing clients intimating them of change of distributor. The new distributor will have to attach a sample of such communication along with list of clients with PAN and folio numbers and the bank attestation of signature
- For legal heirs, they need to submit additional documents like relationship with deceased MFD, NOC from other legal heir by downloading this form and individual affidavit through this form
- AMCs will have to effect changes to ARN after cooling period of 15 days. In case of any objection, AMCs can withhold such a transfer
AMFI has clarified that all the nominees or legal heirs will have to obtain ARN to continue distribution business of the deceased MFD.
For instance, if an MFD appoints more than one nominee, the share of trail commission on assets built before the death of MFDs will be segregated among all nominees (between both) in the proportion given by the MFD. If the MFD has not mentioned any proportion, his assets will be divided equally among nominees i.e. 50% each in your case.
