What is AMFI: Its Meaning, Roles, and Objectives

What is AMFI: Its meaning, pivotal roles, and core objectives. Uncover how the Association of Mutual Funds in India shapes the mutual fund industry and safeguards investor interests.
4 mins
17 Feb 2024

The Association of Mutual Funds in India (AMFI) is a self-regulatory organization (SRO) for the mutual fund industry in India. It was established in 1995 to protect the interests of investors in mutual funds. AMFI is responsible for regulating the mutual fund industry, promoting investor education, and ensuring the smooth functioning of the market.

Mutual Funds in India

Mutual fund is a trust that pools the savings of numerous investors and invests them in a diversified portfolio of securities. They offer benefits such as professional fund management, liquidity, and diversification, making them a preferred choice for both new and seasoned investors.

What are the Objectives of AMFI?

AMFI has several key objectives:

  • Establishing and upholding high professional and ethical standards across all aspects of the mutual fund industry's operations.
  • Advocating and endorsing best business practices and a code of conduct for members and other stakeholders engaged in mutual fund and asset management activities, including those linked to capital markets and financial services.
  • Engaging with the Securities and Exchange Board of India (SEBI) to represent the mutual fund industry's interests on various matters.
  • Representing the industry's concerns and interests to the Government, Reserve Bank of India, and other relevant entities.
  • Conducting nationwide investor awareness programs to enhance understanding of mutual fund concepts and operations.
  • Disseminating information about the Mutual Fund Industry and conducting research, both independently and in collaboration with other organizations.
  • Regulating the conduct of distributors, including the imposition of disciplinary actions such as ARN cancellation for code of conduct violations.
  • Safeguarding the interests of investors and unit holders.

Committees under AMFI

AMFI operates through various committees dedicated to different aspects of mutual fund operations. These committees work on issues such as compliance, ethics, and investor education to ensure the smooth functioning of the industry. These include:

  • Committees for Financial Literacy under AMFI
  • AMFI Certification Committee for Distributors (ARN Committee)
  • Committees overseeing Operations and Compliance at AMFI
  • Risk Management Committees at AMFI
  • Committees comprising Chief Investment Officers (CIOs) for Equity at AMFI
  • Valuation Committees at AMFI
  • Committees dedicated to Exchange-Traded Funds (ETFs) at AMFI

What is the AMFI Registration Number?

It is mandatory for all mutual fund distributors like brokers, agents, and various intermediaries to obtain an ARN from AMFI. To ensure that all the intermediaries engage in ethical and transparent mutual fund sales, they are mandated to obtain the AMFI ARN (AMFI registration number) registration in India.

The ARN certification remains valid for three years and can be extended upon submission of necessary documentation. ARN can be acquired through both online and offline channels.

Additional Read - Pros and Cons of Mutual Funds.

Why Should Investors Know About the ARN?

Investors should be aware of the ARN to safeguard their investments. Dealing with authorised distributors with a valid ARN ensures that investors receive proper guidance, disclosures, and services. It helps in differentiating genuine distributors from unauthorised ones.

Other Services of the AMFI

  • AMFI provide daily updates of Net Asset Values (NAVs) for mutual funds on its website. Investors can check the latest NAV of their investments or funds they are interested in directly on the AMFI website.
  • The website also offers access to the history of mutual funds for investors, helping them track fund performance.
  • AMFI simplifies the search for Mutual Fund distributors in India by allowing individuals to locate distributors by specifying their city, PIN code, and other relevant details.
  • AMFI provides vital information in the form of circulars, announcements, and intermediaries associated to mutual fund distributors. This information serves as a valuable resource for investors, enabling them to access essential details about AMFI member fund houses and make informed investment decisions.

Conclusion

The Association of Mutual Funds in India (AMFI) plays an indispensable role in nurturing and safeguarding the interests of investors. Its commitment to promoting transparency, ethical conduct, and investor education underscores the importance of AMFI in facilitating the growth and stability of the mutual fund industry in India. As investors, understanding AMFI's significance can empower us to make informed investment decisions.

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Frequently asked questions

Are Mutual Funds regulated by AMFI?

No, the Association of Mutual Funds in India (AMFI). Mutual Funds are regulated by the capital markets regulator, Securities and Exchange Board of India (SEBI) under SEBI (Mutual Funds) Regulations, 1996.

How many associations of Mutual Funds are there in India?

 In India, AMFI is the primary association representing mutual funds.

What is AMFI fees?

AMFI, the Association of Mutual Funds in India, charges fees for various services and activities, including registration fees for asset management companies (AMCs) and distributor fees for individual agents and agencies.

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