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The Association of Mutual Funds in India (AMFI), was incorporated in August 1995, as a non-profit organization, working in association with SEBI. The objective is to develop the Indian Mutual Fund Industry on professional, healthy and ethical lines. It seeks to enhance and maintain standards in all areas, to protect and promote the interests of Mutual Funds and investors.
Currently, AMFI has 44 members, which includes 42 AMCs registered with SEBI.
Every Mutual Fund House, Mutual Fund Advisor, Mutual Fund Distributor, Trustees, and Intermediary Agent must register with AMFI. The details of them, you can find on the government website.
Role of AMFI in improving investor awareness
AMFI has been instrumental in setting up of ethical and transparent standards of procedure, in the Indian Mutual Fund market. Since its inception, it has contributed significantly to protect the interests of investors as well as fund houses. It takes research & studies and disseminates information on the Mutual Funds industry.
Moreover, it seeks to make Mutual Funds Investment easier so that more general public get aware of the investment opportunity. The aim is to position mutual funds as a preferred investment option for prospective investors.
It puts up advertisements displayed across different media such as TV, Digital, radio, print, cinema and outdoor hoardings in different languages. These explain the benefits of investing in mutual funds. And help in communicating with potential investors that investing in the best mutual funds is the right option for them for growth.
Their various advertising & awareness campaigns make it easy for the common public to understand, compare & invest in mutual funds. It intends to dispel the many myths surrounding such investments. Also, attempts to raise consumer awareness that they must not ignore the risk factors.
AMFI has a lot of committees to ensure that each of its objectives is being fulfilled. Some of the prominent committees are:
- Committee on Valuation,
- Committee on Operations & Compliance,
- Committee on Registration of Certified Distributors,
- Committee on Financial Literacy.
Objectives of AMFI
- Define and outline the standards for every operation in Mutual Funds processing, in an ethical, uniform and professional way.
- To encourage the members and investors to keep up honorable business practices and regulations.
- Makes AMCs, Agents, Distributors, Advisories and other entities that are involved in the capital & financial market, to comply with the various guidelines laid down.
- Networks under SEBI and comply with their mutual fund regulations. To interact with SEBI, as an advisory sometimes too, for all related matters with the MF.
- Represents the Finance Ministry, RBI, and SEBI regarding their guidelines, with the MF industry. Conversely, it represents the stakeholders from the industry in front of the government, RBI, SEBI and other bodies that have a link with the mutual fund industry.
- Spread awareness across the country households to take mutual funds benefits and safe mutual fund investments.
- Distributes information about Mutual Fund Sector. Conduct research and workshops on various funds, unitedly with various AMCs registered with it.
- Keeps a check that the Code of Conduct is being followed to the core, by everyone included and take disciplinary action in case of rule violations. They play consultant to SEBI or other government agencies to help frame the Code of Conduct and promote best business practices.
- Investors can approach AMFI with their grievances and register complaints against a fund manager or a fund house.
- Safeguards the interest of investors and asset management companies.
Get AMFI Registration Number or ARN
AMFI Registration Number or ARN is a unique number allocated to those mutual fund agents, distributors, and brokers who clear NISM Certification. Whereas, in case you are a senior citizen, clearing the CPE (Continuing Professional Education) is mandatory, to get this ARN. Without this AMFI Registration Number, you are not allowed to sell a mutual fund or even recommend any.
ARN ID card is issued to the companies and individuals engaged in Mutual Funds trading, by the AMFI. This card contains the name of the AMC, a picture of the cardholder, his ARN number, address of the corporate and validity. It is essential that you cross-check this ID Card before investing under the agent’s advice, whether investing in ELSS or some other Mutual Fund, through Lump Sum or SIP. This way you can easily verify the honesty and credibility of the broker or the fund house.
This NISM certificate is valid for only 3 years.
What is EUIN?
Subsequent to the SEBI circular of September 2012, AMFI has created a Unique Identity Number of the employee, customer relationship manager or the salesperson of the distributor who is directly transacting with the investor for the sale of mutual fund products. This number is in addition to the AMFI Registration Number (ARN) of the distributor. This Employee Unique Identification Number is referred to as “EUIN”.
Quoting of EUIN is essential while undertaking advisory transactions.
Take Note: EUIN is applicable to sales staff of the non-individual ARN holders.
EUIN is meant to prevent sales in the name of ARN holder entity even if the employee/relationship manager/salesperson leaves the employment.
Why Investors must be aware of ARN & EUIN?
Brokers, agents, and other salespersons play a significant role in attracting more investors to invest in Mutual Funds. AMFI authorizes only those entities or persons who have an ARN Number to sell mutual funds. This way only qualified people can legitimately sell funds to prospective investors. All third-party agents must get registered and clear the qualification test to become AMFI-registered advisers.
These people are well-versed with the types of mutual funds, current market trends and the suitable investment option according to the investor’s objectives.
ARN & EUIN have been created to tackle the problem of mis-selling.
Do not invest in the mutual funds with any entity without ARN/EUIN. You can verify their registration number before investing, at the government portal of Registrar & Transfer Agency, M/s Computer Age Management Services Pvt. Ltd. or CAMS at myCAMS.
- You should ensure that the application form for investing in Mutual Funds if routed through a Distributor, has a valid ARN code, Sub broker ARN code, and EUIN.
- Additionally, you should use only those application/transaction forms that have spaces for the Sub-broker ARN Code and the EUIN.
- On the other hand, if you wish to invest in a Direct Mutual fund, remember to specify the ARN of the AMC and not that of the distributor in the “Direct” box. You may also drop the applications at CAMSonline.
The Process of Registration or Renewal of ARN
A. Online Method
AMFI has authorized myCAMS to act as their processing agent of ARN, on its behalf. For registering, the Intermediaries are required to apply in the prescribed form, that can be downloaded from AMFI’s website www.amfiindia.com.
The details required to be submitted for applying in the individual category of intermediaries are as below:
- Adhaar details.
- The registered mobile number, linked with your Adhaar Card.
- You don’t need to submit your NISM passing certificate & mark sheet for registration or renewal because the CAMS imports it directly from NISM, using the Adhaar details.
- Pay the fee as applicable.
- Once your documents are verified, you get your ARN License.
B. Offline method
If you didn’t submit your Aadhar details at the time os NIMS certification, you would need to apply in person or offline.
- Obtain the Application Form from the office of AMFI or any office of CAMS.
- Submit the Application along with KYD (Know Your Dealer) application. The individual has to present the KYD application form in person.
- Submit your NISM Certificate copy, Aadhaar card copy, PAN card copy, bank account proof.
- 2 Passport size photographs.
- Pay the fee as applicable.
- Once your documents are verified, you get your ARN License.
In summary, AMFI has the responsibility of making mutual funds a trusted and transparent investment vehicle over the years. Whereby, if you have any dispute with an AMC related to some scheme, you can file a complaint with AMFI.
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