Amfi – Association Of Mutual Funds - Amfi Nav, Role, Registration

If there is one organization in India that has played a stellar role, and continues to play a stellar role in educating investors about the nuances of mutual fund, it is the Association of Mutual Funds of India. Popularly known as AMFI, it is just an association to further the cause of mutual funds and ensure that mutual funds penetrate better in India.

The AMFI handles the daily NAV dissemination of all funds as well as dissemination of the monthly flows data of various categories of mutual funds. It also handles the ARN registrations for individuals to ensure that in the entire mutual fund selling process, the integrity, transparency and investors interest is sustained.

What exactly is the role played by AMFI in India?

Indian mutual fund industry has grown by leaps and bounds in the last few years. As of November, the Indian mutual fund segment has assets under management of Rs.3.80 trillion or close to $500 billion. There are a total of 9.78 crore mutual fund folios in India of which SIP folios itself are close to 5 crore. MFs have emerged as an important intermediary.

When it comes to investing, there are several cases wherein the channelization of savings into mutual funds does not happen properly. That is because either the investor's money is misused or the product is mis-sold to the end customer, defeating the purpose of investor education. For such investor disputes or queries, the AMFI helps protect investor interest.

AMFI is a non-profit association and has been existence since 1995. The sole purpose of AMFI is to work for the benefit of investors by offering them transparency in mutual fund practices. AMFI plays a key role in restoring the faith of the investors in case they face any issues in the Indian Mutual Fund Industry, including key disputes. AMFI works under the guidance of SEBI.

The office bearers of AMFI are mostly the senior representatives of the mutual fund industry in India. All advisors, agent and trustees must be registered with AMFI.

What are the principal objectives of AMFI?

AMFI was set up with some very broad objectives on hand. Here is a summary.

• To ensure the ethical standard of mutual fund operations in India
• Oversee the operations of AMCs and mutual fund agents and ensure that they follow the code of conduct and also encourage fair business practices
• Seeking guidance from SEBI for any issues concerning mutual funds industry and escalate issues appropriately
• Keeping mutual fund industry informed with updates and undertake research activities with other bodies from time to time
• Ensuring distributors operate on the basis of the code of conduct and AMFI also takes actions in case of any violations
• Protection of interest of investors so that the integrity of the mutual fund intermediation mechanism is maintained

What is the purpose of the existence of AMFI in India?

Here is what the AMFI will ensure among the mutual fund segment in India.

• It lays stress on ensuring ethical practices and transparency in the mutual fund industry
• AMFI will make MF investments accessible to new investors by ensuring transparency
• Every fund house, or fund advisor or agent should seek approval from AMFI if they are involved in mutual fund operations and management

How and why must interemdiaries take AMFI registration?

Intermediaries are the backbone of the mutual fund industry in India. They play a significant role in establishing and nurturing the mutual fund cult in India. To ensure that individual agents, brokers and other intermediaries carry out MF selling with ethics and transparency, the AMFI ARN registration is mandatory in India. Here is what you need to know about the AMFI-ARN registration.

• The minimum age for obtaining ARN (AMFI Registration Number) is 18 years
• Getting an ARN number is essential for agents and advisors to get in touch with the AMC for empanelment as agents / advisors for mutual fund schemes.
• The ARN is like a license number for selling mutual funds and indicates that you are eligible to engage in mutual fund selling and advising.
• In the case of senior citizens, they are required to clear the Continuing Professional Education (CPE) test to get ARN.
• AMFI issues ARN certification only upon clearing the National Institute of Securities Market (NISM) certificate, which is valid for 3 years.

Can you sell mutual funds without the ARN and can ARN be withdrawn?

If a fund manager, broker, agent wants to deal with mutual fund selling, they should get a permit from AMFI and the association will provide them with a unique AMFI registration number or ARN. The AMFI ARN is a license that the entity is qualified to sell mutual funds. Nobody is allowed to sell or recommend mutual funds to investors without the ARN licence.

There are 3 scenarios wherein the ARN license can be withdrawn by AMFI.

• If there has been a violation of the code of conduct
• If the registered entity commits a serious offence
• A complaint of negligence is filed which is upheld by a consumer court

Is it possible for brokers / agents to renew the ARN online?

Brokers or agents who are registered with an AMFI ARN number can renew their ARN online using online or offline method. Here is how the online renewal happens in following steps.

1. Link your Aadhar card with registered Mobile Number
2. In case you do not have Aadhar Card, apply for it at your nearest centre
3. Pay renewal fee through internet banking online facility
4. Submitting the NISM passing certificate at the time of renewal is not mandatory
5. Once you receive the approval, you will get the ARN licence immediately

Is it possible for brokers / agents to renew the ARN offline?

Brokers or agents who are registered with an AMFI ARN number can renew their ARN offline in case they are not able to do it online. Here are the key steps.

• Step 1: Visit the AMFI portal and login with your credentials

• Step 2: The user ID is your ARN number, and the password is sent by email by the CAMS

• Step 3: AMFI fills your personal details by getting it from NISM

• Step 4: After you get the certificate, pay the fee online

• Step 5: Your ARN gets renewed instantly

The Association of Mutual Funds in India (AMFI), unlike popular believe, is not a self-regulatory organization. It is more like a watchdog that ensures that the mutual fund selling happens in a transparent manner without indulging in mis-selling.