It indicates that the individual is a certified Financial Advisor
The asset allocated & the application for the same are identifiable
It is used to compute the feasibility of the brokerage
What compliance regulations does the distributor have to follow?
Needs to ensure that his AMFI registration does not expire & is always valid
Needs to follow all circulars that are issued by AMFI & SEBI
Cannot claim any brokerage for his/her own investment
Cannot share brokerage with the client
Needs to submit the Self Declaration form to the AMC before the end of the financial year
What are the consequences of being Non Compliant?
Suspension of AMFI Certificate.
In case Self Declaration is not submitted to AMC before the end of the financial year, or within 3 months from the start of next financial year the distributor will face brokerage suspension till submission
What is brokerage and how is it paid?
Brokerage is the commission computed for services rendered as a distributor
Brokerage by the name of “UPFRONT” is paid for a fresh application or for further /new investment for the client by advisor
Brokerage by the name of TRAILFEE is paid for investments to be retained in a particular fund
Additionally, the Asset Management Company may incentivize the advisors for achieving Sales Targets
How can a distributor have a Nomination and what is the commission payable to Nominee?
The distributor can appoint a nominee for the brokerage received by him/her
The Nomination procedure is the same as the procedure for UNIT HOLDING
The commissions accrued till the date of death of the distributor are payable to Nominee
Any further purchases / switches that are made after the date of death do not attract commission
How does one change the existing broker code in the records?
The following documents are required to process the change in Broker Code:
A letter is required by the client (investor)
A No Objection Certification from the advisor whose code needs to be changed
How does one change the Bank Mandate?
The advisor needs to make available the following documents for a change in the Bank Mandate:
A letter from the Distributor for the change in Bank Mandate
Copy of a cancelled cheque.
A filled in & duly signed Updation Form
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