AMFI: Mutual Fund Distributors Submit eclaration of
self-certifications DSCs by 2019, December 31 to avoid forfeiture of commission..!
AMFI
has clarified that mutual fund distributors will have to submit their
declaration of self-certifications (DSCs) by December 31, 2019 to avoid
forfeiture of commission. That means fund houses cannot pay commission withheld
due to non-submission of DSCs from 2020 January 1 onwards.
While distributors are required to
submit DSC within three month of the end of financial year i.e. June 30, 2019 AMFI
has given them six-month grace period to comply with the SEBI norms i.e. until
December 31, 2019.
So far, there was no stipulated
timeframe for AMCs to pay withheld commission because of non-submission of
DSCs. Distributors used to get their withheld commission as and when they submitted
their DSC.
In a communication, AMFI said, “The
matter was reviewed by AMFl's Standing Committee on Mutual Fund Distributors
(ARN Committee) and the committee also endorsed the above view. Since a grace
period of 6 (six) months is allowed for renewal of ARN, the committee proposed
that on the same logic, a maximum period of 6 months from June 30, 2019 (being
the due date for submission of annual DSC) may be allowed for submission of the
annual DSC, i.e., up to December. 31, 2019 failing which, the commission
withheld due to non-submission of DSC shall be forfeited.”
“Accordingly, effective from the
year ended March 31, 2019 onwards, each mutual fund agent / distributor shall
submit an annual DSC in the prescribed format within 3 months after the end of
each Financial Year, i.e., by June 30, failing which, payment of all accrued
commission shall be withheld by the AMCs, till the time the DSC is submitted.
Further, a grace period of 6 months from June 30, 2019 (being the due date for
submission of annual DSC), i.e., up to 2019, December.31 shall be allowed for submission of
the DSC. If the annual DSC is not submitted by December 31, 2019 the commission
withheld for non-submission of DSC shall stand forfeited.”
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