Amfi certification for agents, distributors made mandatory

Our Markets Bureau

Mumbai, Nov 5: In its move to improve the overall professional standards of agents and distributors of mutual fund (MF) products, the Securities and Exchange Board of India has made mandatory the certification programme of the Association of Mutual Funds in India (Amfi) from November 1, 2001. Amfi had first introduced this programme on July 27, 2000 on a voluntary basis.

Accordingly, all new agents and distributors of MF products can sell these only after having mandatorily undergone Amfi’s certification programme. The existing agents and distributors, however, have been given time till December 31, 2003, while employees of MFs have been given time till December 31, 2002.

Speaking to The Financial Express, Amfi chairman AP Kurian said: “There is a positive response we have received from agents and distributors for the certification test.” Around 2,000 agents and distributors have already appeared for the test, Mr Kurian added.

Currently, there are around 36 MFs, with over 400 schemes to chose from. IDBI Principal Asset Management Company MD & CEO Sanjay Sachdev said: “The Amfi test will not only help the distributors give quality financial advice, taking into consideration the investors age, appetite for risk, return expectations of the investors and overall investment objectives which are the basic tenets of investing. It will also make them well informed of the Sebi guidelines, rules and regulations.”

The industry feels that the test will also assist the distributors to effectively sell various innovative product like systematic investment plan (SIP) to achieve the investors’ investment objectives. Agents and distributors are the main intermediaries between the funds and the investors in advising the latter on investments. Meanwhile, MFs are expected to monitor the activities of their agents/distributors.