MFs give agents more time for biometric cards, KYD norms

An impression of the right hand index finger will help check the record

PTI | March 3, 2011



Mutual funds have given their distributors one more month to comply with stringent identity verification norms wherein agents are required to get biometric cards that carry information like finger-print impressions.

Market regulator Sebi in September 2010 ushered in a major overhaul of the way mutual funds were sold with the introduction of biometric cards and stringent licencing norms for distributors to weed out agents indulging in frauds.

As per the Sebi direction, all fund houses were asked to comply with 'Know-Your-Distributor (KYD)' norms before the grant or renewal of registration of distributors.

While the norms were implemented for new distributors with effect from September 1, 2010, the existing distributors were required to comply with the new requirements by February 2011.

However, the mutual fund industry body AMFI has now extended this deadline by one month and asked the existing distribution registration holders to comply with the new KYD norms by the end of March.

The distributors and some fund houses, too, were not very keen on the new set of rules and had been lobbying hard for its annulment, said an official at a leading fund house.

The fund houses and distributors were hopeful of some reprieve after U K Sinha, formerly chairman of Amfi and chief of fund house UTI MF, became the Sebi chairman last month.

The new requirements have not been done away so far, but AMFI has now extended the deadline for completing KYD process by existing registration by one month.

The fund houses would suspend payment of commissions to distributors not completing the KYD process by March 2011.

The agents would be required to get biometric cards that would carry an impression of their right hand index finger and help in immediately checking the distributor's record for any possible irregularities in the past.

The KYD norms, devised on the lines of KYC (Know-Your- Customer) norms followed by banks and other financial service providers, would require distributors to submit identity and address proofs, PAN and bank account details.

Besides keeping a check on agents indulging in fraudulent activities, the move is also aimed at weeding out non-serious agents and those indulging in mis-selling activities.

There are more than one lakh distributors working for about three dozen fund houses in the country.

Previously, grant of registration needed a certificate for having passed an AMFI certification examination, two photographs and payment of a registration fee.

However, pursuant to a directive from market regulator SEBI, the AMFI certification has been replaced by a certification programme for distributors conducted by the National Institute of Securities Markets (NISM). .

 

Comments

 

Other News

How Rafi, Raj Kapoor helped pave the way for a great uranium deal

There`s a certain moment in diplomacy that`s too personal to be captured in a communiqué, too small to make the front page, but more revealing than the front page. This week, prime minister Narendra Modi reached Tashkent and, amid the pomp of state visits, managed to evoke the old Bollywood tunes

Distinguishing Fish 1 and Fish 2: The pragmatism behind India’s WTO ratification

 India became the 123rd WTO member to ratify the multilateral Agreement on Fisheries subsidies (AoFS) when it deposited the Instrument of Acceptance for Phase 1 on July 20, 2026. The ratification is restricted to disciplining Illegal, Unreported and Unregulated fishing (IUU), protection for overfished

The 7% growth problem: Why the next 7% will be harder

India has become accustomed to hearing the 7% growth number. It is now less a milestone than an expectation. Yet the paradox is becoming clearer: maintaining 7% growth may be considerably harder than achieving it once. India’s real GDP grew 7.7% in FY2025–26, following growth of 6.5% in FY202

The Constitution cannot be altered: Justice Abhay Oka

Justice Abhay Oka, who retired from the Supreme Court in May 2025, has said that the Constitution of India cannot be altered. Explaining the landmark Kesavananda Bharati judgment (1973) on the basic structure of the Constitution, he said, “This is one judgment that has saved democracy in India.&rdq

How the flora and fauna evolved in the Indian subcontinent

Mammals of India  By A.J.T. Johnsingh and P.O. Nameer HarperCollins India in association with Bombay Natural History Society  

India`s renewable race is moving beyond megawatts

When Shell bought Sprng Energy in 2022, India`s renewable energy market appeared to offer precisely what global energy majors were seeking: scale, growth and a place in one of the world`s largest energy transitions. Four years later, Shell is selling the same business to Aditya Birla Group for an enterpris

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter