The Association of Mutual Funds in India – AMFI – is an industry organisation established in 1995 for managing the Indian investment funds segment. Most Indian mutual fund managers and companies are members of AMFI. The organisation strives to develop the Indian investment fund market and maintain ethical and professional standards.
AMFI is a government non-profit organisation supervised by the Securities and Exchange Board of India (SEBI). SEBI incorporated it on 22 August 1995. As of April 2015, AMFI had 44 registered members. AMFI members are the asset management companies that are registered with the organisation. These members have collective assets under management (AUM) worth over Rs. 27 lakh crores.
Objectives of Association of Mutual Funds in India (AMFI)
AMFI is a self-regulatory agency established collectively by Indian fund houses and asset management companies (AMC). It is an institution entitled to supervise the activities of investment funds and the financial management of investors.
The mutual funds’ sector in India is still an underdeveloped financial domain. There have been many misconceptions and fears regarding the stock market and investment funds due to the lack of awareness and financial education.
The lack of knowledge initially hindered even minor participation in the mutual fund investment segment. Therefore, over the years, regulators such as SEBI and AMFI have become active and are playing an essential role in investing in financial education.
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The Association of Mutual Funds in India protects the interests of investors and financial management companies.
Role of AMFI: Creating investor awareness
AMFI is involved in developing a clear and transparent framework for the Indian mutual fund arena. Over decades, it has been an instrumental player in protecting the interests of investors and fund houses. It has made financial investments easier and more transparent to appeal to more people.
All fund houses, trustees, agents (intermediaries) and financial advisers have to register with AMFI. It presently has 44 members, including 42 SEBI-registered asset management firms. The Association of Mutual Funds in India’s foundation advocates for risk-free mutual fund investments and highlights the benefits of investing safely.
The Association of Mutual Funds in India aims to:
- Demonstrate ethical and uniform professional standards in all member organisations under AMFI.
- Encourage members and investors to comply with business rules and guidelines.
- Get advisories, AMCs, distributors, agents, and other entities included in the capital market or financial service areas to comply with their guidelines.
- Act as a bridge between SEBI and members and ensure that SEBI’s financial instructions are followed.
- Represent the Reserve Bank of India, Finance Ministry, and SEBI on everything related to the industry.
- Educate the public on investment opportunities and benefits.
- Disseminate information on partnerships, as well as research and training in various contexts of mutual funds.
AMFI reviews the Code of Conduct rules and takes disciplinary action if its members violate the law. Mutual fund investors may contact AMFI to file a complaint and register their grievances against a fund manager or house in case of an irregularity.
AMFI Registration Number (ARN)
The AMFI Registration Number (ARN) is a unique number assigned to financial agents, distributors and other financial market participants who act as brokers. It can only be attained by National Institute of Securities Markets (NISM) certified personnel or entities. If you are a senior citizen, qualifying for the CPE (Continuing Professional Education) is compulsory. Without this number, you cannot sell or trade any mutual fund.
AMFI offers ARN ID cards to companies and resellers operating in mutual funds trade. Please note that the NISM certificate is only valid for three years. This certificate includes AMC name, cardholder’s photo, AMFI Registration Number (ARN), and business address. It helps investors verify the legitimacy of brokers or AMCs
ARN important is extremely important for investors
Financial market middlemen such as brokers, agents or intermediaries play an essential role in attracting potential investors for mutual funds. To ensure that only eligible people can sell, participate in mutual fund trade and engage with potential buyers, AMFI only authorises individuals or organisations with an AMFI Registration Number.
All external applicants must register and pass the exams to become an AMFI entity of advisors. Never engage with an intermediary that does not have ARN while investing in mutual funds. Before you start investing money, you need to verify the AMFI registration number of your broker.
