FAQs Why is the AMFI (ARN) Registration important? a. It is needed for identification purposes b. It indicates that the individual is a certified Financial Advisor c. The asset allocated & the application for the same are identifiable d. It is used to compute the feasibility of the brokerage What compliance regulations does the distributor have to follow? a. Needs to ensure that his AMFI registration does not expire & is always valid b. Needs to follow all circulars that are issued by AMFI & SEBI c. Cannot claim any brokerage for his/her own investment d. Cannot share brokerage with the client e. Needs to submit the Self Declaration form to the AMC before the end of the financial year What are the consequences of being Non Compliant? a. Suspension of AMFI Certificate. b. In case Self Declaration is not submitted to AMC before the end of the financial year, or within 3 months from the start of next financial year the distributor will face brokerage suspension till submission What is brokerage and how is it paid? a. Brokerage is the commission computed for services rendered as a distributor b. Brokerage by the name of “UPFRONT” is paid for a fresh application or for further /new investment for the client by advisor c. Brokerage by the name of TRAILFEE is paid for investments to be retained in a particular fund d. Additionally, the Asset Management Company may incentivize the advisors for achieving Sales Targets How can a distributor have a Nomination and what is the commission payable to Nominee? a. The distributor can appoint a nominee for the brokerage received by him/her b. The Nomination procedure is the same as the procedure for UNIT HOLDING c. The commissions accrued till the date of death of the distributor are payable to Nominee d. Any further purchases / switches that are made after the date of death do not attract commission How does one change the existing broker code in the records? The following documents are required to process the change in Broker Code: a. A letter is required by the client (investor) b. A No Objection Certification from the advisor whose code needs to be changed How does one change the Bank Mandate? The advisor needs to make available the following documents for a change in the Bank Mandate: a. A letter from the Distributor for the change in Bank Mandate b. Copy of a cancelled cheque. c. A filled in & duly signed Updation Form