Mutual fund distributors may need to rename firms after Amfi order

Several mutual fund (MF) distributors might have to get themselves rechristened because industry body Association of Mutual Funds in India (Amfi) has barred distributors from using nomenclature that has references to advisors. The move follows the decision taken by markets regulator Securities and Exchange Board of India (Sebi) to separate distribution and advisory functions in the MF industry.

“Pursuant to the regulatory amendment, MF distributors whose registered name has terms such as adviser / advisor / financial adviser/ investment adviser/ wealth adviser/wealth manager etc, are required get their registered name changed,” Amfi said in a circular.

Amfi issued a non-exhaustive list of names that are permitted and prohibited for distributors.

“The name of an MF distributor should reflect the registration held by the entity and should not in any way create an impression of performing a role for which the entity is not registered. Thus, every MF distributor, while dealing in distribution of securities, should clearly specify that he /she is acting as an MF distributor,” Amfi has said.

The industry body has also prescribed font size for MF distributors to be used in all forms of communication such as website, mobile app, business card and signboards.