Don't call yourselves advisors, AMFI tells mutual fund distributors

Association of Mutual Funds in India (Amfi) has asked mutual fund distributors to not identify themselves as advisors.

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Association of Mutual Funds in India (Amfi) has asked mutual fund distributors to not identify themselves as advisors. In a circular released by AMFI on Wednesday, the mutual fund industry body said, “No person, while dealing in distribution of securities, shall use the nomenclature Independent Financial Adviser or IFA or wealth adviser or any other similar name, unless registered with SEBI as an investment adviser.”

The AMFI circular also said mutual fund distributors who use the terms adviser/ advisor/ financial adviser/ investment adviser/wealth adviser/wealth manager/wealth managers etcetera should change their registered name.

This move comes after Securities and Exchange Board of India clarified in a notice that the name of an MFD (Mutual Fund 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 MFD, while dealing in distribution of securities, should clearly specify that he /she is acting as a MFD.


As per Regulation 3(3) of the SEBI (Investment Advisers) Regulations, 2013 notified on July 3, 2020, SEBI has also clarified that –

1.MFD’s Name and tagline, should be placed together in a clear and legible font size. The same disclosure should be followed in all forms of communication i.e. website, mobile app, printed or electronic materials, business card, sign board etc.

2.The timeline for making an application to RoC for change in name has been extended from October 15, 2020 to October 31, 2020. The same timelines will apply for MFDs established as proprietary/partnership firms.
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AMFI has drawn up a list of names which are permissible and not permissible for broad guidance of the MFDs. However, it said the lists are only illustrative and not exhaustive. If the proposed name of any MFD is not included in the list of permissible/non permissible names, the concerned MFD may write to AMFI via email to contact@amfiindia.com.

AMFI has asked all MFDs to display a tagline, “AMFI-registered Mutual Fund Distributor” along with their name, in a clear and legible font of at least font size 12, in all forms of printed communication.
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