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Prudent Corporate

16 Aug 2024

ARN for Mutual Fund Distributor: Meaning, Benefits and How To Apply

The Association of Mutual Funds in India (AMFI) gives mutual fund distributors a unique code, the ARN (AMFI Registration Number). It is a key identifier. It ensures that a mutual fund distributor has a registration and follows industry rules. To distribute mutual funds in India, one must get an ARN.  This grants access to various mutual fund products and boosts credibility. This blog explains what is ARN number and It also shows how it helps mutual fund distributors. Lastly, it provides a step-by-step application process.   Table of Content 1. What is ARN number 2. How to get an AMFI Registration Number? 3. ARN Application Process 4. Benefits of ARN registration to Mutual Fund Distributor 5. ARN Renewal Process 6. Conclusion   1. What is ARN Number ARN full form in mutual fund stands for AMFI Registration Number. Each registered mutual fund distributor has a unique alphanumeric identifier known as the AMFI Registration Number (ARN) to distribute various mutual fund schemes. 18 is the minimum age required to obtain an ARN. The ARN registration number comprises six distinct components that follow a particular pattern. This code is alphanumeric, and it follows a format resembling this one in certain ways:  For example, ARN Code: CC 06 09 21 432652 4   Breakdown of code 2. How to get an AMFI Registration Number? Age The applicant must be at least 18 years old.  Certification The National Institute of Securities Markets (NISM) Series V-A: Mutual Fund Distributors Certification Examination must be passed by the candidate.  This certification ensures the distributor knows mutual funds and their regulations. Observance of Regulatory Mandates: The applicant must follow all SEBI rules on mutual fund distribution. 3. ARN Application Process     4. Benefits of ARN registration to Mutual Fund Distributor Recognition and Trustworthiness Registered Mutual fund distributors are given a unique identification number called the AMFI Registration Number (ARN).  This number shows that the regulator approved the distributor of mutual funds. It acts as a symbol of authenticity and credibility.  The ARN serves as a trust indicator for investors, letting them know that the distributor they are working with is reputable and approved. Adherence to Regulations In India, anyone marketing or distributing mutual funds must obtain an ARN. This stipulation guarantees that all mutual fund distributors follow AMFI and SEBI's rules.  The ARN system promotes fair practices and protects investors. It does this by ensuring all registered entities follow the same rules. Observation and Responsibility The ARN system improves oversight and accountability in mutual fund distribution. AMFI tracks the performance and activity of all ARNs registered in a database.  This system helps detect and resolve misconduct or code violations. Distributors with ARNs are regularly audited and evaluated. This ensures they meet the required standards and act in investors' best interests. Dispute Resolution An ARN offers a formalized process for resolving grievances. Investors can file complaints with AMFI referencing the ARN of the distributor in question if they have problems with a mutual fund distributor.  This mechanism guarantees that complaints are sent to the right person and are handled quickly and effectively.  The existence of an ARN registration improves investor protection and faith in the mutual fund sector by assisting in the accountability of distributors and offering a transparent dispute resolution process. Flexibility to Investors If an investor is unhappy with their existing mutual fund distributor they can quickly move to any other distributor. Other holders of ARNs will receive their assets and investments.  They also no longer require ro stay connected to their previous distributor. ARN Renewal Process The ARN has a three-year validity duration. ARN holders must apply to renew their cards. Do so six months before the current validity period expires. Validity period of the ARN will be applicable in case the renewal application has been submitted before the expiry. If the request is post the date of expiry then it would be valid from the date of submission of the renewal application.  For holders of Corporate ARNs, the three-year extension of the registration letter will begin on the day the renewal application comes in. Conclusion Anyone wishing to start a mutual fund distribution business must first obtain an ARN. It offers ways to earn commissions.  It ensures compliance with regulations. It also gives a distinct identity. You can apply for an ARN and start a rewarding career as an AMFI registered mutual fund distributor. Just follow the steps above.