AMFI clarified Mutual Fund Distributors are very much subject to /come under the purview of SEBI Mutual Fund Regulations

Sep 22, 2022 | by TeamLease RegTech Legal Research Team

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Secretarial ComplianceThe Association of Mutual Funds of India (AMFI) on September 22, 2022, clarified that Mutual Funds Distributors (MFDs), are very much governed by the SEBI Mutual Fund Regulations, 1996 (“the Regulations”) and the circulars/directives issued thereunder, as explained below –

Responsibilities of acts of commission or omission by the person whose service has been procured by the Asset Management Company are cast upon the Asset Management Company under Regulation 25(3) of SEBI Mutual Fund Regulations. 

Code of Conduct for Mutual Funds are laid down by SEBI in the Regulations and SEBI has clarified in its circular MFD/CIR No.10/310/01 dated September 25, 2001, that all Mutual Funds shall direct their agents/distributors to follow the provisions of SEBI Regulations and Guidelines pertaining to Mutual Funds with a specific focus on Regulations/guidelines on advertisements/sales literature and code of conduct. SEBI has also directed mutual Funds to monitor the activities of their agents/distributors so they may not indulge in any kind of malpractice or unethical practice while selling/marketing mutual funds units. 

This has been further emphasized in SEBI Circular No. MFD/ CIR/ 06/210/2002 dated June 26, 2002, and circular no. SEBI / IMD / CIR No. 8 / 174648 / 2009 dated August 27, 2009, requires the MFDs to abide by the Code of Conduct for Mutual Fund Intermediaries prescribed by AMFI.

 As per SEBI circular no. MFD/CIR/20/23230/2002 dated November 28, 2002, all intermediaries engaged in selling and marketing of mutual funds units need to be mandatorily registered with AMFI, subject to the person passing the prescribed certification examination and adherence to guidelines as specified by SEBI and AMFI from time to time. 


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