All about AMFI-Association of Mutual funds-Role, Objectives, NAV

Did you know that the Association of Mutual Funds of India is the one organisation in India that has been instrumental in teaching investors about the complexity of mutual funds? If you didn’t, now you do.

AMFI is a non-profit organisation that is committed to furthering the cause of mutual funds and ensuring that they have a more substantial presence in India. This goal is accomplished through ensuring that mutual funds have a greater presence in India.

This organisation is in charge of broadcasting the daily NAVs of all funds as well as the monthly flow statistics for a variety of different categories of mutual funds.

During the entirety of the process of selling mutual funds, it is also responsible for managing individual ARN registrations in order to preserve honesty, openness, and investor interest.

In light of this, we will talk about the Association for Mutual Funds in India in today’s blog post:

Just what is the AMFI?

The Association of Mutual Funds in India is a charitable organisation that works to increase awareness of mutual funds in the Indian market. It is an organisation of mutual funds in India that are registered with SEBI and is well-known for the “AMFI NAV” service that it provides.

On August 22, 1995, it received its charter to operate as a charitable organisation. You may locate certified Mutual Fund distributors in a certain region by using the “Find distributor” option of the AMFI website, which can be accessed at amfiindia.com. This tool can be found on the website of the AMFI.

The Net Asset Value (NAV), circulars, bulletins, updates, and many other information that are pertinent to the business of mutual funds are among the other services that are provided.

Role

Since the beginning of the 2000s, there has been a meteoric growth in the number of people investing in mutual funds in India. As of the month of November, the mutual fund sector in India has Rs.3.80 trillion, which is equivalent to over $500 billion, in assets under administration.

In India, there are 9.78 billion mutual fund folios, with systematic investment plan (SIP) folios accounting for close to 5 billion of those folios. As a direct consequence of this, MFs have successfully positioned themselves as an essential link in the chain.

When it comes to investing, there are many situations in which savings are not put to good use by being invested in mutual funds as they should be.

The purpose of investor education is undermined when, for example, an investor’s money is stolen or when a product is offered in a way that is not in the best interest of the end consumer. This organisation lends a hand in preserving investor interests in situations when investors have questions or concerns, and it does so by providing assistance.

AMFI is an organisation that does not seek to make a profit and was established in 1995. The sole mission of AMFI is to help investors by offering them transparency in the operations of mutual fund companies.

This group plays a significant part in regaining investor trust in the Indian mutual fund industry, which includes resolving crucial disagreements. SEBI oversees its activities.

The office bearers of AMFI are predominantly high-ranking leaders from the mutual fund sector in India. This organisation mandates that all trustees, agents, and advisors must first become registered members.

Objectives

  • lays forth the professional and ethical requirements that must be met by all mutual fund operations in accordance with the association’s standards.
  • Members and investors are strongly urged to adhere to ethical standards and guidelines when conducting business.
  • Obtains compliance from other businesses engaged in the capital market or financial services industries, such as AMCs, agents, distributors, and advisors.
  • SEBI-approved networks that are in compliance with the standards governing mutual funds. In all matters relevant to the industry, represents the Finance Ministry, the Reserve Bank of India, and the Securities and Exchange Board of India (SEBI).
  • As well as distributing information on the mutual fund sector and conducting research and workshops on a range of funds, this organisation also hosts these events.
  • Maintains a watchful eye on everyone’s compliance with the Code of Conduct and implements disciplinary measures for those who breach the rules.
  • Investors have the ability to voice their objections and submit formal complaints against specific businesses.
  • The interests of investors as well as asset management companies are safeguarded.

Committees

This organisation has, during the course of its existence, made it a priority to work toward the establishment of a mutual fund investor education programme. In addition to this, it is responsible for the dissemination of information on the Mutual Fund business through making use of research and studies, either directly or indirectly.

It has a number of committees to ensure that each of its aims is accomplished, namely as follows:

  • Committee on Valuation
  • Committee on Operations and Compliance Committee on Registration of Certified Distributors Committee on Financial Literacy Committee on Operations and Compliance Committee on Registration of Certified Distributors
  • AMFI Members
  • As of right now, each and every one of the 42 mutual funds is a member. As a result, we may roughly place them into the following categories:

What exactly is an AMFI Registration Number, often known as an ARN?

AMFI Registration Numbers are given out to everyone involved in the mutual fund industry, including agents, distributors, and brokers (ARN). Individuals are only qualified for one after successfully passing the NISM Certification exam.

In addition, if you are a senior citizen, you are needed to pass the CPE exam, which stands for continuing professional education. If you don’t have this number, you won’t be able to advertise or even sell mutual funds.

AMFI issues an ARN ID card to both businesses and individuals that engage in trading of mutual funds. Bear in mind, on the other hand, that the NISM certificate is only valid for a period of three years.

In it, you’ll see the name of the AMC, a photo of the cardholder, the ARN number, the location of the corporate office, as well as the validity term (three years). As a direct consequence of this, investors have an easier time doing cross-checks.

Why is it necessary to use ARN?

Through the use of brokers, agents, and intermediaries, potential investors are encouraged to put their money into mutual funds. AMFI restricts the sale of funds to prospective investors to only those individuals or firms who are in possession of an ARN Number. This is done to guarantee that only qualified individuals offer funds to potential investors.

Registration and successful completion of a qualifying exam are prerequisites for any third-party agent hoping to become an AMFI-registered advisor.

These individuals have an understanding of mutual funds, the movements of the market, and the causes behind such fluctuations. When it comes to investing in mutual funds, we ask that you not give any consideration to any company or organisation that does not have an ARN.

Always verify the registration number before to making any financial commitments. If you wish to make a direct investment, you need to enter the ARN code of AMC rather than the code of the distributor in the box labelled “direct.”

You may also send applications with ARNs to Registrar & Transfer Agencies like CAMS and Karvy. These agencies accept submissions.

Are ARNs able to be withdrawn, and is it possible to sell mutual funds without an ARN?

If a fund manager, broker, or agent wants to market mutual funds, the first thing they need to do is get an AMFI permission, which will provide them with a specific AMFI registration number, also known as an ARN. A company’s eligibility to sell mutual funds can be verified by the AMFI ARN certification.

Without the appropriate authorization from the ARN, no one may offer or recommend mutual funds to investors. In one of these three situations, AMFI has the authority to revoke the ARN licence.

In the event that there has been a breach of the code of conduct; In the event that the registered entity has been found guilty of a serious crime
A claim of negligence is lodged, and a consumer court finds that it has merit.

How do you go about registering or renewing your ARN?

a) Registration and renewal of an ARN through the use of the internet

In order to register for or renew your ARN, you will need to link your Aadhaar number to your registered mobile number. ii. If you have not yet provided your Aadhaar data, you will need to manually submit an application.
Make the payment using your online banking platform to register or renew your vehicle.
You do not need to provide CAMS your NISM passing certificate in order to register or renew your membership because CAMS may import it directly from NISM.
After they have completed the verification of the papers that were submitted on the AMFI site, you will instantly be issued a new ARN licence.

The steps to take in order to register or renew an ARN offline.

  • Make use of the credentials you’ve been given to log in to the official AMFI portal.
  • Your ARN number will serve as your user id, and CAMS will provide you a password via email. ARN numbers are case-sensitive.
  • After your verification has been completed, AMFI will instantly get your information from NISM.
  • After you have successfully completed the NISM certification or CPE requirements, you may either pay the cost online (using net banking or a debit or credit card) or at the fund house.
  • The ARN/EUIN registration and renewal process happens instantly. In a nutshell, AMFI has been an important driving force behind the development of mutual funds as a dependable and open-book kind of investment vehicle.
  • AMFI Examination A few years ago, AMFI was the organisation that was responsible for administering the certification exam for Mutual Fund Distributors. On June 1, 2010, the AMFI exam was finally retired for good. Before June 2010, the Association of Mutual Funds in India was in charge of administering the exam, and candidates who passed it were awarded a Certificate.

As part of an initiative led by SEBI, the AMFI examination was relocated to the National Institute of Securities Markets (NISM). As a result of SEBI’s efforts to consolidate all financial product certifications under the NISM umbrella under one umbrella, this decision was arrived at.

As a consequence of the change, the examination that was once known as the AMFI test is now known as the NISM-Series-V-A: (5A) Mutual Fund Distributors Certification Exam.

Service AMFI NAV for AMFI

The Net Asset Value of the mutual fund scheme is equal to the total market value of all of the securities it holds (NAV). As a result, the NAV, also known as the net asset value, is used as the metric for determining how successful a mutual fund plan is.

On any given date, the net asset value (NAV) of a mutual fund may be computed by dividing the market value of the securities held by the mutual fund scheme by the total number of units held by the mutual fund scheme. This yields the NAV per unit.

To put it another way, the NAV is the price that you pay for each unit in the mutual fund scheme.

In addition to these services, the Indian Association of Mutual Funds provides a wide range of other options. For example, all mutual funds’ daily Net Asset Values (NAV) are provided.

Those who are interested in the AMFI NAV or the AMFI NAV history can go directly to the website and get the Net Asset Value (NAV) for the whole collection of schemes. On the AMFI website, it is also possible to view the historical values of the NAV.

Bottomline

It is a common misconception that the Association of Mutual Funds in India (AMFI) is a self-regulatory entity; however, this is not the case. Instead, it performs more of a monitoring role, ensuring that sales of mutual funds are carried out in an open and honest manner and that no instances of improper selling take place.

We hope that you found this blog to be interesting and that you will apply its lessons to the fullest extent possible in the real world. Share this blog with your loved ones and assist us in achieving our goal of increasing people’s awareness of the need of sound financial management by showing some love.

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