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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 Mutual Funds Distributors, or the 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 meet-cute between the Investors and Mutual Funds Investors for services like the stock market or mutual funds. Likewise, Mutual Fund Distributors play a pivotal role in promoting the sale of mutual funds.
The Mutual Fund Dispensers in India hire these Mutual Funds Distributors for the following purposes:
ü Connect with potential Investors
ü Dispensing Information about Mutual Funds to these investors
ü Aid Investors in investing in the right Mutual Funds
ü Understanding the Investor’s investment goals
ü Analyzing the risk appetite of the Investors
ü Recommending MF suggestions as per Investor’s Financial Situation
In India, the Mutual Fund Distributors or 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 Mutual Fund Distributors 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 MFD is engaged with.
Apart from the commissions, the Mutual Fund Distributors or the MFDs offer additional services to their clientele, such as:
ü Financial Planning for Investors
ü Issuing chargeable Investment Advisory
ü Managing client’s portfolio
ü Aid in the selection of best Mutual Fund schemes
ü Investment Suggestions as per Client’s Investment Objectives
ü Investments Monitoring services
ü Generate performance reports on Investor’s portfolio
Here we list some of the reputed Mutual Fund Distributors operating in India. They can be your companion when you register yourself as an MFD with the SEBI:
ü HDFC Bank Mutual Fund Distributor
ü ICICI Securities
ü Kotak Mahindra Bank Mutual Fund Distributor
ü Axis Bank
ü SBI Mutual Fund
ü Bajaj Capital Mutual Fund Distributor
ü Aditya Birla Sun Life Mutual Fund
ü Reliance Mutual Fund
ü DSP Mutual Fund
Eligibility Criteria for Mutual Fund Distributor (MFD) license registration in India
To become a Mutual Fund Distributor 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:
Ø The applicant must be of at least 18 years of age to apply for Mutual Funds Distributor license
Ø The applicant must have passed at least Class 12
Ø The MFD license aspirant must obtain the requisite NISM or SEBI certification
Ø The applicant must possess at least two years of experience in the Securities Market
Ø The applicant must build a physical space for business service dispensation with the following basic amenities:
Ø The applicant must comply with the following norms as prescribed by SEBI and other Authorities:
Ø The applicant must pay the requisite MFD registration fee
Documents required for Mutual Fund Distributor (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 Mutual Fund Distributor license registration in India:
Ø PAN card
Ø Aadhaar Card
Ø Proof of Address, like:
ü Passport
ü Voter ID Card
ü Driving License
ü Other government-issued ID
Apply for SEBI professional consultancy services to get a clearer idea of the latest documentation requirements per SEBI’s directives.
Every Mutual Fund Distributor or 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 registration procedure for you in the following steps:
The applicant must apply for and get a valid Permanent Account Number card before applying for the Mutual Fund Distributor license with the NISM.
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:
The applicant must register with the Association of Mutual Funds in India. The registration process goes by filing the registration form along with the following attachments:
Thereafter, the applicant must obtain a NISM certification from the National Institute of Securities Markets. But the applicant will be awarded the certification when they pass the MSD (Mutual Fund Distributors) Certification Examination from NISM.
After clearing the examination, the MSD license applicant must register with the Securities and Exchange Board of India for the SEBI MSD registration form, documents, and fee receipt.
After obtaining the requisite license, the newly registered Mutual Funds Distributor 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 Mutual Fund Distributor (MFD) license in India
If you wish to become a Mutual Funds Distributor in India, then you must seek the requisite MFD certificate from the AMFI. But the MFD certification procedure, as with many registration procedures, is Danish 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 Mutual Fund Distributor registration fees.
FAQs
Q. How does a licensed Mutual Fund Distributor earn in its lifetime?
A. The earnings of a licensed MFD depend on multiple factors, like the type of Mutual Funds house. There are also additional sources from which an MFD can earn.
Q. Who regulates the functioning of a Mutual Fund Distributor in India?
A. AMFI and SEBI
Q. What is the total number of Mutual Fund Distributors in India?
A. The Mutual Funds Industry of India has a whooping 1.26 lakh MFDs in the country. This includes the corporates as well.
