No registration fees for new MF distributors for 5 month

Tags: Mutual Funds
In a move aimed to triple the mutual fund distributor base in the country, the Association of Mutual Funds in India (Amfi) on Wednesday decided to waive registration fees for all first-time distributors for a five-month period starting from February 1 to June 30 this year.

“The objective of this initiative (to waive registration fee) is to create larger number of feet-on-street to distribute mutual fund products” said H N Sinor, chief executive, Amfi.

Amfi charges Rs 3,000 per new registration, which itself is a reduction from Rs 5,000 charged till November last year. The fee was reduced as part of an initiative to attract more distributors.

The latest Amfi move comes at a time when mutual fund investor numbers in India are falling at a rapid pace.

“This initiative is largely with the intention of enlarging the distribution network and attracting new cadre of distributors/IFAs (independent financial advisers) for selling mutual fund products,” according to an Amfi statement.

V Ramesh, deputy CEO of Amfi, told Financial Chronicle that he hoped the move to triple the mutual fund distribution base by adding 100,000 people. At present, the total mutual fund distributors number is pegged at about 50,000, of which about 6,000-7,000 are corporate distributors.

Amfi said the distributors registering under the category of individuals (including senior citizens) and new cadre of distributors, need not pay the registration fees if they register during the same period subject to fulfilling the following conditions. They include: 1) Senior citizens who qualify under the criteria stipulated by Sebi, that is, a person who has attained age of 50 years as on May 31, 2010 or has at least 10 years of experience in the securities market and/or in distribution in mutual fund products as on May 31, 2010, 2) new cadre of distributors should be compliant with the criteria approved by Sebi, 3) individuals, senior citizens and new cadre of distributors having valid certificate for passing NISM (National Institute of Securities Markets) examination/attending CPE (continuing professional education) programme.

Amfi said the ARN (Amfi registration number) card issued will be valid up to three years from the date of passing the date of NISM examination/attending CPE programme. However, renewal of ARN after three years shall be subject to payment of prescribed fees, as applicable at the time of renewal.

The mutual funds body also decided to include new cadre of distributors to reach out to more people.

Under the new cadre are intermediaries/agents engaged in distribution of financial products, example, insurance agent, FD agent, national savings scheme products and PPF registered with any other financial services regulator, with at least five years of experience.

Business correspondents appointed by banks having at least five years of experience are also allowed to become mutual fund distributor by registering with Amfi.

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