Obtaining EUIN is mandatory for salespeople and individual ARN holders.
In order to detect mis-selling, SEBI has come out with a system called employee unique identity number (EUIN) which is allotted to employees/salespersons/relationship managers giving advice to clients in banks and other distribution firms. The EUIN will remain unchanged even if the employee switches his/her job. EUIN is applicable to both non-individual ARN holders like banks and large distribution firms and also to individual ARN holders even if do not have any salespeople advising mutual funds. The EUIN card bears the employee’s name, EUIN, name, photo and validity period. AMFI has assigned the task of creating EUIN to registrar CAMS. The rule came into effect from January 01, 2013.
Applicability
Mentioning EUIN is mandatory for transactions like purchases, switches and registration of systematic investment plan (SIP) and systematic transfer plan (STP). EUIN is not applicable for transactions like systematic withdrawal plan, ongoing installments under SIP/STP/SWP, dividend reinvestments, allotment of bonus units, creating zero balance folios and redemptions. Quoting EUIN is mandatory only in ‘advisory transactions’ and not in ‘execution only’ transactions. Fund houses have created a provision in their application forms to capture EUIN along with ARN code and the sub broker code.
Process
AMFI unit of CAMS maintains the database of EUIN. Distributors are required to intimate AMFI if any of their salespersons leave the job. Employees of distributors have to be registered with AMFI and they should hold a EUIN failing which the ARN holder will not be paid any commissions. Individual ARN holders also need to obtain EUIN without which they will not be entitled to any commissions on the business procured by them.
Distributors can send a declaration stating that the advice was ‘transaction only’ and they have not charged any advisory fee or furnish EUIN to the concerned AMC if they have not mentioned EUIN in application forms within 90 days failing which the commission on such transactions are forfeited permanently.
Exception
EUIN is not applicable to overseas distributors if they are compliant with extant laws where they do business.
