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AMFI – Association of Mutual funds - AMFI NAV, Role, Registration

The Association of Mutual Funds India and the Securities and Exchange Board of India (SEBI) monitor and regulate the mutual funds industry. Read further to know more about AMFI.

Earlier, in India, investing in a mutual fund was considered risky due to ambiguity and lack of information among people regarding investment. The government of India and Reserve Bank of India initiated the formation of Unit Trust of India (UTI) to encourage small investors to invest in various money market investments. The journey of mutual fund industry began with the growth of UTI. Later the entry of public sector, private sector, international players steadily gave momentum to the industry that empowered its growth.

An Overview of AMFI - Present Scenario

According to the Consolidated Account Statement, the mutual fund industry reported nearly 36 lakh new investors, during the financial year 2018-19. The investment in a mutual fund is now a trending thing, not just among experienced investors, but youngsters too, thanks to the various mutual fund commercials.

When it comes to investing, there are several cases wherein investor's money is misused, or the Asset Management Company (AMC) does not follow the transparency norm. For any such investor dispute or queries, the Association of Mutual Funds India (AMFI) is the set up for the protection of investors' interest.

This non-profit association came into effect in 1995. The sole purpose of AMFI is to work for the benefit of investors by offering them transparency in mutual fund practices. AMFI restores the faith of the investors in case they face any monetary issue in the Indian Mutual Fund Industry.

So, for instance, if you're an investor facing a monetary issue or want to file a complaint regarding a mutual fund, the Association of Mutual Funds in India should be your first stop. The association works under the guidance of SEBI.

Currently, AMFI comprises of 44 members out of which 42 are SEBI-registered asset management companies. For every fund expert, agent, trustees and advisor, it is necessary to register with AMFI.

Objectives of Association of Mutual Funds in India

  • 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, as well as encourage effective business practices

  • Seeking guidance from SEBI for any issues concerning mutual funds industry

  • Keeping mutual fund industry informed with updates and undertake research activities with other bodies

  • Ensuring distributors operate basis the code of conduct and taking actions in case of any violations

  • Protection of interest of investors

Role of Association of Mutual Funds (AMFI) in India

  • The association's presence is instrumental in ensuring ethical practices and transparency in the mutual fund industry

  • Making investments accessible to new investors by ensuring transparency

  • Every fund house, company or fund expert should seek permission from AMFI if they are involved in mutual fund operations and management

AMFI registration

Intermediaries play a significant role in the sale of mutual funds. To ensure that individual agents, brokers & other intermediaries are carrying out trading with ethics and transparency, the AMFI ARN registration is a mandate in India.

  • The minimum age for obtaining ARN is 18 years

  • • After getting ARN licence, the intermediaries should get in touch with AMC for empanelment and choose a mutual fund scheme

  • The number indicates that you have the right to engage in mutual fund trading.

  • The Senior Citizens should clear the Continuing Professional Education (CPE) test to get ARN.

  • AMFI issues the number only upon clearance of National Institute of Securities Market (NISM) certificate that is valid for three years.

If any fund manager, broker, agent or company wants to deal with mutual fund management, they should get a permit from Association of Mutual Funds in India that will provide them with a unique AMFI registration number or ARN. The AMFI ARN gives the investors the right to check the credibility of a fund house and whether the entity is qualified to sell mutual funds. It is a legal offence if someone is selling or recommending mutual fund units to investors without the ARN licence.

The AMFI has a right to withdraw the licence of intermediaries under three scenarios:

  • Violation of the code of conduct

  • If they commit a serious offence

  • A complaint of negligence which is upheld by consumers court

Brokers, agents & companies can renew ARM in two ways:

Steps for Online renewal of ARN:

  • Step 1: Link your Aadhar card with registered Mobile Number

  • Step 2: In case you do not Aadhar Card, apply for it at your nearest centre

  • Step 3: Pay renewal fee through internet banking

  • Step 4: Not necessary to submit the NISM passing certificate at the time of renewal

  • Step 5: Once you receive the approval, you will get the ARN licence immediately

Follow the below steps for Offline renewal of ARN

  • 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

To sum up, the Association of Mutual Funds in India (AMFI) exists to preserve the interest of the investors. In case, you're facing any issue related to mutual fund trading, or there is a violation of conduct by any intermediary, then AMFI will assist in your problems.