Amfi to upgrade certification test

Plans separate module for offshore funds

The Association of Mutual Funds in India (Amfi), the representative body of asset management companies (AMCs), is in the process of upgrading the mutual fund certification programme in a bid to bring in more competency among fund distributors and advisors.

While a new work book is being designed for the certification test, Amfi is also working on a separate module for offshore funds.

“We are now going to revise the work book and the question bank will be based on it. The work book will be released by December 2009. Upgrading the test modules will help distributors and advisors gain more expertise about the products,” said A P Kurian, chairman, Amfi.

“The scope of the certification programme could be extended to cover all components of financial planning. Implementing a minimum standard of giving advice is an essential next step towards the industry’s development. The programme should also include knowledge about global products,” said Navin Suri, CEO, ING Investment Management.

The Amfi test is a multiple option-testing programme, with 50 being the passing mark out of a total of 100.

The certification programme comes in two modules — Amfi Mutual Fund - (Basic/employees) Module Certification and Amfi Mutual Fund (Advisors/distributors) Module. There are no restrictions of age or qualification for anyone to take the test, but the Securities and Exchange Board of India (Sebi) has made it mandatory for every entity engaged in marketing and selling of mutual fund products to pass the certification test (advisors module).

Amfi and those AMCs that distribute offshore funds, feel that there should be separate module for the distributors who wish to sell global funds. “The asset allocation patterns of offshore equity funds are different from conventional schemes that are guided by domestic market dynamics. So, there should be separate test and training for the distributors who sell such schemes,” said the CEO of a global AMC.

“We will work out a separate module for the distributors who also want to sell products that invest across other global markets, but we have not finalised anything in this regard so far,” said Kurian.

There are about 90,000 Amfi-certified distributors in India at present. Though an upgradation of the test could help bring in more expertise among distributors, some fund houses feel that any significant change in the test modules could complicate the test, which would not be desirable, considering the low penetration level of the industry as compared to the insurance sector. As per industry estimates, there are about 3 million life insurance agents in India at present.