FAQs on Do’s & Don’ts for MFDs- AMFI..!
By Mr. Yaseen Sahar, Financial Expert
In an FAQ on do’s and don’ts for MFDs (mutual
fund distributors), AMFI has asked MFDs to
maintain a proper record of risk profiling of all their clients in physical or
electronic form.
Further, MFDs will periodically review risk
profiling of clients and update it in their book of records.
Further, AMFI has clarified that MFDs can do
goal-based investment for their clients.
However, such incidental advice should be
limited to investments in mutual funds.
Here
are other key highlights of the FAQ that matters the most:
MFDs can provide incidental
advice limited to mutual funds
Incidental advice does not
include providing financial planning
MFDs cannot do financial
planning or use such words.
However, MFDs can have
advisory relationship with clients, which is limited to recommendation of
mutual fund schemes.
If a client has execution
only relationship i.e. only related to transaction in mutual funds, the MFD
will have to send a written communication to investor about non-suitability of
the scheme.
Such a communication has to
be acknowledged by the investor.
MFDs can promote their
business but can use materials approved by AMCs or available on AMFI website.
MFDs can have a YouTube
channel but they cannot give any scheme specific recommendations or talk about
performance of MF schemes.
MFDs cannot make commentary
on past performances and future return prediction on their social media handles.
MFDs can offer multiple
products and services and market it on their website.
MFDs need to keep record of
product suitability and consent of investors if they offer execution only
services.
MFDs should also maintain a
complaint register physically or digitally.
FAQs on Do’s & Don’ts
for MFDs- AMFI
https://www.amfiindia.com/Themes/Theme1/downloads/FAQsonRoleofMFDsAdvts.pdf
Mr. Yaseen Sahar has been reached at rahas84@gmail.com and 98433 13512
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme
related documents carefully. The past performance of the mutual funds is not
necessarily indicative of future performance of the schemes.
