AMFI Guidance on MFD Nomenclature

AMFI GUIDANCE ON MFD NOMENCLATURE

(Pursuant to Regulation 3(3) of the SEBI (Investment Advisers) Regulations, 2013)

1. BACKGROUND

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

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. 

Pursuant to the above regulatory amendment, mutual fund distributors (MFDs) whose registered name has the terms such as Adviser / Advisor / Financial Adviser/ Investment Adviser/ Wealth Adviser/Wealth Manager/Wealth Managers etc. are required get their registered name changed. 

SEBI has also clarified that – 

1. The name of an MFD 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.
2. 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.
3. The timeline for making 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.

2. LIST OF   PERMISSIBLE / NON-PERMISSIBLE NAMES

Since the aforesaid regulation covers a wide range of ‘other similar names/ terms’ that may not be permissible, AMFI has been receiving requests from MFDs for providing guidance as to which names/terms are allowed. 

In this regard, AMFI has drawn up a list of names as per Annexure, which in AMFI’s view, are permissible / acceptable, as well as list of names/ terms that are not permissible, for broad guidance of the MFDs.    

MFDs are advised to make sure that their name is in line with the above list. 

However, it may please be noted that the lists are only illustrative and not exhaustive. If the proposed name of any MFD is not included in the aforesaid list of permissible / non-permissible names, write  to AMFI via email to [email protected] 

3. MANDATORY TAGLINE TO BE MENTIONED BY MFDs WITH THEIR NAME

As mentioned above, SEBI has also advised that MFD should display their name and tagline in a clear and legible font in all forms of communication i.e. website, mobile app, printed or electronic materials, business card, sign board etc.  

In this regard, all MFDs are advised to mention/display a  tagline, “AMFI-registered Mutual Fund Distributor”  along with / below  their name, in a clear and legible font of at least font size 12, in all forms of printed communication,  so as to ensure compliance with the above requirement.  

You are requested to take note of the contents of this circular for due compliance.

With Regards,

Sincerely,

Sd/-

N. S. Venkatesh Chief Executive      

ANNEXURE 

LIST OF   ACCEPTABLE & NON-PERMISSIBLE NAMES