AMFI bars distributors from using 52 titles1 min read . Updated: 22 Oct 2020, 07:39 AM IST
- On 23 September, Sebi had issued a guidance barring mutual fund distributors from using words like independent financial advisor and other 'similar names'
Association of Mutual Funds in India (AMFI) has released a list of 52 prohibited names for mutual fund distributors, following the market regulator's guidelines barring MFDs from using words like independent financial advisor and similar names.
The MF regulator also released a list of acceptable names such as money services, asset services and securities. Only Sebi registered investment advisors are allowed to use the prohibited names.
The list of prohibited names is not exhaustive, the AMFI circular specified. It also added that MFDs have to mention the term ‘AMFI Registered Mutual Funds Distributor’ on their website, signboards, business cards and other printed and electronic materials in font size 12. MFDs who are corporates and have any of the prohibited words in their name, must apply to the Registrar of Companies (RoC) for a change by 31st October. The same timeline is applicable for non-corporate MFDs, the AMFI circular said.
“This will bring a lot of clarity to thousands of MFDs especially in individual and small firms," said Dhruv Mehta, Chairman, Foundation for Independent Financial Advisors. “I would say they are micromanaging excessively with font size, for example, but this was indeed a much needed and inevitable step," added Srikanth Matrubai, CEO, SriKavi Wealth, a mutual fund distributor.