Mutual Fund Distributor license registration in India

A Mutual Funds Distributor can be thought of as a Person or a Company involved in the sales and distribution of Mutual Funds to prospective investors. These MFDs work on behalf of major Mutual Funds Houses or Dispensers.

An MFD can be thought of as an Investment Intermediary. They play a vital role in the financial world by arranging a connection between the Investors and Mutual Funds Investors for services like the stock market or mutual funds. Likewise, MFDs play a pivotal role in promoting the sale of MF schemes. 

To engage in distribution of mutual funds in India, it is necessary to secure Mutual Fund Distributors Certification. Connect with Registration for assistance in securing this certification easily!

Purpose of a Mutual Fund Distributor in India

The Mutual Fund Dispensers in India hire the MFDs for the following purposes:

• Connect with potential Investors
• Dispensing Information about MFs to these investors
• Aid Investors in investing in the right MFs
• Understanding the Investor’s investment goals
• Analyzing the risk appetite of the Investors
• Recommending MF suggestions as per Investor’s Financial Situation

Who registers a Mutual Funds Distributor in India?

In India, the MFDs are registered with the Association of Mutual Funds in India, commonly known as AMFI. The Securities and Exchange Board of India regulates the operating behavior of MFDs in India. The MFDs earn their commission from the Mutual Fund houses as they bring businesses to them. The earned commission value varies from the type of Mutual Funds Dispenser the MFDs are engaged with.

How does a Mutual Funds Distributor earn in India?

Apart from the commissions, the MFDs offer additional services to their clientele, such as:

• Financial Planning for Investors
• Issuing chargeable Investment Advisory
• Managing client’s portfolio
• Aid in the selection of best Mutual Fund schemes
• Investment Suggestions as per Client’s Investment Objectives
• Investments Monitoring services
• Generate performance reports on Investor’s portfolio

Some of the Reputed Mutual Funds Distributors in India

Here we list some of the reputed MFDs operating in India. 

• HDFC Bank
• ICICI Securities
• Kotak Mahindra Bank 
• Axis Bank
•  SBI MF
• Bajaj Capital 
• Aditya Birla Sun Life MF
• Reliance MF
• DSP MF

Eligibility Criteria for MFD License Registration in India

To become an MFD in India, the MFD license applicant must meet the requisite pre-conditions as per the Securities and Exchange Board of India, defined in the following pointers:

• The applicant must be of at least 18 years of age to apply for MF Distributor license

• The applicant must have passed at least Class 12

• The MF distributor license aspirant must obtain the requisite NISM or SEBI certification

• The applicant must possess at least two years of experience in the Securities Market

• The applicant must build a physical space for business service dispensation with the following basic amenities:

• • Computer

  • Internet Connection

  • Telephone

• The applicant must comply with the following norms as prescribed by SEBI and other Authorities:

• • Anti-Money Laundering (AML)

  • Know Your Customer (KYC) 

If you fulfill the mutual fund distributor eligibility requirements, then you can go ahead and initiate the application filing process.

Documents Required for MFD registration in India

For Mutual Fund Distributor license registration, applicants must submit the necessary documents to further their candidature to the NISM. Therefore, we have detailed the required documentation for MF distributor license registration in India:

• A self-attested copy of the applicant’s documents, namely:
  • PAN card
  • Aadhaar Card
• Proof of Address like Passport,  Voter ID Card, Driving License or Other government-issued ID
• Proof of requisite Educational Qualification, as SEBI has mandated at least 12th standard clearance to register as an MFD
• Recent Passport Size Photographs
• Know Your Customer (KYC) details to aid in clearing their client’s identity
• Applicant’s Bank Account Details, such as the following:
  • Canceled Cheque
  • Bank Statement
• SEBI’s MFD license registration form
• MFC Licensing Fee receipt

Apply for SEBI professional consultancy services to get a clearer idea of the latest documentation requirements per SEBI’s directives.

Process for MFD license registration in India

Every MFD license applicant in India must register itself with the AMFI, i.e., the Association of Mutual Funds in India. The AMFI issues the certification obtained from the NISM or the National Institute of Securities Markets. We have defined the mutual fund distributor process for you in the following steps:

Step 1: Apply for and Obtain a PAN Card

The applicant must apply for and get a valid Permanent Account Number card before applying for the MFD license.

Step 2: Complete your Know Your Distributor (KYD) procedure

After attaining the PAN Card, the MFD license applicant must complete his Know Your Distributor or KYD process. He must file his KYD form along with the required documents to any of the following:

• MF Intermediaries

• Registrar

• Transfer Agents

Step 3: Apply for MFD license registration with AMFI

The applicant must register with the AMFI. The registration process goes by filing the registration form along with the following attachments:

• PAN card

• Proof of Residence

• Applicant’s Photograph

• Fee Payment

Step 4: Obtain the requisite MFD certification from the NISM

Thereafter, the applicant must obtain a NISM certification from the National Institute of Securities Markets (NISM). But the applicant will be awarded the certification when they pass the mutual fund agent exam known as the MFD Certification Examination from NISM.

Step 5: Apply for SEBI registration

After clearing the examination, the MFD license applicant must register with the Securities and Exchange Board of India for the SEBI MFD registration form, documents, and fee receipt.

Step 6: Showcase strict adherence to Training Requirements

After obtaining the requisite license, the newly registered MF Distributors must complete the training requirements as mandatorily directed by AMFI as well as SEBI periodically.

Since the MFD license registration is a remote service, its registration process and requirements are variable per the agency’s directives. We advise you to check with the involved agencies, like AMFI and SEBI, for the latest guidelines before applying for MFD license registration in India.

Our Assistance in getting you the MFD license in India

If you wish to become a Distributor of Mutual Funds in India, then you must seek the requisite MFD certificate from the AMFI. But the MFD certification procedure, as with many registration procedures, is a hassle for people not well-versed with such legal procedures. Here, Registrationwala comes in handy to you. The Legal Experts at Registrationwala can make you sail through the entire MFD certification procedure in no time. Let us take you through our MFD certificate consultancy procedures:

1. Apply for and obtain a PAN card on your behalf
2. File in your KYD details
3. Compile the relevant documentation
4. Apply for an MFD license registration
5. Apply for SEBI’s registration & deal with post-registration formalities

If you want to know more about the Mutual Fund Distributor licensing procedure, contact one of our Incorporation Experts. Our MFD certification consultants can also brief you on the related matters of the MFD registration fees.

FAQs

Q. How much do licensed Mutual Funds Distributors earn in their lifetime?

A. The earnings of a licensed MFD depend on multiple factors, like the type of Mutual Funds house and commissions. There are also additional sources from which an MFD can earn.

Q. Who regulates the functioning of Mutual Funds Distributors in India?

A. AMFI and SEBI are responsible for regulating the functioning of MFDs in India.

Q. How to become mutual fund distributor?

A. You can become an MFD by passing the NISM MFD Certification Examination, registering with AMFI, and obtaining an MFD license.

Q. How can I find help in obtaining a license for a mutual fund distributor near me?

A. You can reach out to the Registrationwala team for assistance in obtaining an MFD license.

Q. What are mutual fund distributor benefits?

A. The benefits of MFD are commission earnings, flexible Work Schedule, growing MF market, and client relationship building.