The Association of Mutual Funds in India is a non-profit government organization in the Mutual Funds’ sector that acts as a primary regulator under SEBI. The primary objective of the AMFI is to Protect the interest of investors. In this post, we will discuss AMFI and its Importance.
The Association of Mutual Funds in India is an industry standards organization in India in the mutual fund sector. the organization was incorporated on 22nd August 1995, and ever since then, it helps to set various regulations that maintain the ethics and transparency of Mutual Funds among Indian investors.
Objectives of AMFI
- For defining and maintaining high professional and ethical standards in all areas of operation of the mutual fund industry.
- To recommend and promote best business practices and code of conduct to be followed by members and others engaged in the activities of mutual fund and asset management including agencies connected or involved in the field of capital markets and financial services.
- Interact with the Securities and Exchange Board of India (SEBI) and to represent SEBI on all matters concerning the mutual fund industry.
- To represent to the Government, Reserve Bank of India, and other bodies on all matters relating to the Mutual Fund Industry.
- For undertaking a nationwide investor awareness program so as to promote proper understanding of the concept and working of mutual funds.
- To disseminate information on Mutual Fund Industry and to undertake studies and research directly and/or in association with other bodies.
- To take regulate the conduct of distributors including disciplinary actions (cancellation of ARN) for violations of the Code of Conduct.
- Protect the interest of investors/unitholders.
Role of AMFI in creating investor awareness
The AMFI was instrumental in setting ethical and transparent regulations in the Indian mutual fund arena. In the last two decades, it has contributed immensely to protect the interests of investors as well as fund houses.
They make investments more accessible and transparent to attract more people. Hence, every fund house, advisers, trustees, and agents (intermediaries) must register with AMFI, which you can find on the government website. It currently has 44 members, which includes 42 SEBI-registered Asset Management Companies. Their Ads explain the advantages of mutual funds without ignoring the risk factors, which says a lot about their transparency.
The most important role of AMFI in Mutual Fund is to help protect the interest of Indian investors, as well as that of the asset management companies. It also aids in making investments transparent and more accessible to attract more people to it. Therefore, in a bid to make Mutual Fund investments more accessible, fund houses, trustees, advisors, intermediaries, and other concerned individuals should register under AMFI through its website. As of now, it has 44 registered members, including 42 Asset Management Companies registered under SEBI. To promote transparency regarding the Mutual Fund market, even the advertisements put forth by AMFI inform investors about the risks associated with them.
What is AMFI Registration Number or ARN?
AMFI Registration Number (ARN) is a unique number assigned to mutual fund agents, distributors, and brokers. Only those whom clear NISM Certification can get one. Also, if you are a senior citizen, passing the CPE (Continuing Professional Education) is mandatory for the same. and Without this number, you cannot sell a mutual fund or even recommend one.
AMFI issues ARN ID cards to companies and individuals engaged in mutual fund trading. Remember, the NISM certificate is valid only for three years. It entails the name of the AMC, a photo of the cardholder, ARN number, the address of the corporate, and validity (three years). Therefore, it is easier for investors to cross-check.
Why is ARN important to investors?
Brokers, agents, and intermediaries play a crucial role in luring investors to invest in mutual funds. To ensure that only qualified people sell funds to prospective investors, AMFI authorizes only people or entities with ARN Number. All third-party agents must register and pass a qualification test to become AMFI-registered advisers.
These people are well-versed with mutual funds, market trends, and the reasoning behind. Please do not entertain any entity without ARN when it comes to mutual fund investing. Always double-check the registration number before investing. However, if you wish to invest directly, always specify the ARN code of AMC, and not that of the distributor in the ‘direct’ box. You can also drop applications at Registrar & Transfer Agency like CAMS and Karvy with ARN of the fund house.
How do you register or renew ARN?
a) Online registration and renewal of ARN
- For ARN registration or renewal, link your Aadhaar and registered mobile number.
- In case, you have not submitted the Aadhaar details, apply manually.
- Pay the fee to register or renew ARN via online banking.
- There is no need to provide your NISM passing certificate to register/renew as CAMS can import it directly from NISM.
- Once they verify the documents uploaded on the AMFI portal, you get a new ARN license instantly.
b) Steps to register/renew ARN offline
- Visit the official AMFI portal and log in with your credentials.
- ARN number will be the user id, and the password is sent to your email by CAMS.
- After authentication, AMFI gets your info directly from NISM.
- Once you clear the NISM certification/CPE completion, pay the fee online (net banking or debit/credit card) or directly at the fund house.
- The registration/renewal of ARN/EUIN happens immediately.
AMFI- Association of Mutual Funds in India is a non-profit government organization in the Mutual Funds’ sector that acts as a primary regulator under SEBI. as an investor, we must know about AMFI and its functions. in this post, we discussed the importance of the AMFI I hope this post will help you to understand the basics of AMFI.