As an AMFI-registered Mutual Fund Distributor I am bound by AMFI's Code of Conduct for Mutual Fund Distributors. Its aim is to uphold transparency, competence, fairness and integrity. The points below are a plain-language summary; the full text is the official document.
1. Fiduciary duty
- The investor's interest comes first, with due diligence and independent professional judgement.
- Conflicts of interest are avoided, or disclosed and handled fairly.
- Commission or any financial incentive must never be the basis for recommending a scheme.
- No rebates, gifts or inducements to investors; no churning, splitting of applications or other malpractices.
2. Compliance
- Following SEBI regulations and SEBI and AMFI guidelines, including those on selling, advertising and performance disclosures.
- Complying with AMFI's Know Your Distributor norms and carrying out KYC and in-person verification diligently.
- Being familiar with each scheme's SID, SAI and KIM, and explaining its key features and risks.
- Understanding each client's financial status, experience and objectives to assess suitability.
- Keeping client information confidential and protecting personal data.
3. Infrastructure and record keeping
- Adequate systems, including cyber-security measures to protect electronic data.
- Internal controls to detect and prevent mis-selling, and proper records of clients and their consent.
4. Obligations towards clients
- Giving complete and updated scheme information supplied by the AMCs, and never withholding material facts.
- Highlighting each scheme's risk factors and urging investors to read the SID, SAI and KIM.
- Disclosing all commissions received or receivable, and which funds the distributor is affiliated with.
- Dealing only in Regular Plans, with the commission rates and offer-document links openly displayed.
- Never indicating or assuring returns for any scheme.
- Using marketing material provided by the AMCs, and not displaying an AMC's name or logo without its written approval.
- Making comparisons only between similar, comparable schemes with complete facts.
- Helping to resolve investor grievances.
5. Other obligations
- Holding a valid NISM certification, AMFI registration, ARN and EUIN, and renewing them on time.
- Cooperating with AMCs, AMFI and SEBI, and promptly informing them of changes in status or contact details.
- Not using titles such as Adviser, Wealth Manager or Consultant unless registered with SEBI as an Investment Adviser, and clearly acting as a distributor.
- Displaying the tagline “AMFI-registered Mutual Fund Distributor” with the name on all communication.
6. Integrity of the industry
- No fraudulent or unfair trade practices.
- No false or defamatory statements about any AMC, AMFI, scheme or other distributor; communication must be factual and balanced.
This summary is not a substitute for the Code. You can check the latest version on AMFI's website, amfiindia.com.