AMFI Circular dated October 14, 2011 on Non-renewal & Suspension of Brokerage of Payment ...

The Association of Mutual Funds in India (AMFI) released unified guidelines for AMFI Registered Mutual Fund Advisor (ARMFA) on October 14, 2011.

This has reference to  circular no. CIR/ ARN-09/ 08-09 dated July 18, 2008 on the following subject

1. Clarification/ Modification in Declaration of Self Certification, (Clause no. 5.6)

2.  Suspension of Payment of Commission (Clause No. 6.3 a and b)

 As per the circular  CIR/ ARN-13/11-12 dated October 14, 2011

 

Suspension of Payment of Commission;

a) On non-renewal of ARN:

The payment of commission on business procured by Agent/Distributor after expiry of validity period of ARN to be suspended and the same can be released only on receiving intimation/status about renewal of ARN from AMFI.

ARN Holder has been given Six Months' time for renewal of ARN. In case, ARN is renewed after Six Months of expiry date, ARN holder will not be entitled for commission/trail commission on business mobilised during the period when ARN is invalid i.e. from the date of expiry of ARN till the date of renewal of ARN. Information regarding invalid ARN and its subsequent renewal will be sent to the AMCs by AMFI.

The following example narrates the action required to be taken by the AMCs under various circumstances as mentioned above :

 b) On non-compliance of Annual Certification requirement:

AMFI has already issued guidelines for obtaining self-certification from Agent/Distributors on Annual basis. It is recommended that in case ARN holder fails to comply with the requirements of the annual certification, the payment of commission be suspended till the time ARN holder complies with the requirements of the Annual Certification.


Source:Amfiindia