Amfi sets norms for direct MF firms wanting to become AMCs' agents
Associations sets Rs 1-crore net-worth criteria for execution only platform
 "Amfi sets norms for direct MF firms wanting to become AMCs' agents")
The Association of Mutual Funds in India (Amfi) has set a Rs 1-crore net worth criteria for direct plan distributors seeking to register with it as execution only platform (EOP).
The Securities and Exchange Board of India (Sebi) has mandated online platforms solely into distribution of direct mutual fund (MF) schemes to become EOPs by registering either with exchanges (EOP Category 2) or Amfi (EOP Category 1).
Sebi’s regulation defines the role and compliance requirements for EOPs, as it opens doors for monetisation by allowing them to charge transaction fees. However, Amfi’s guideline has not mentioned a maximum fee that EOPs can charge.
Sebi’s regulation came into force in September and makes registration mandatory from December.
After registering with Amfi as an EOP, MF distribution platforms will have to enter agreements with fund houses to start selling their direct schemes online.
In addition to the net worth criteria, distribution platforms will have to meet Sebi’s conditions saying that an entity should be a 'body corporate' with at least two qualified and experienced managers and one compliance officer.
Amfi’s guidelines set a code of conduct and cyber security frameworks for the platforms.
The National Stock Exchange (NSE) said that MF distribution platforms wanting to become EOP Category-2 can obtain registration through its website.
"Existing members of the exchange as well as body corporates desirous of being onboarded on the EOP segment of the exchange as a new member, may apply for the enablement post completion of the registration process," said NSE in a circular.