ARN Number in Mutual Funds

What is ARN Number in Mutual Funds?

What is an AMFI Registration Number (ARN) in Mutual Funds? It is a unique number given to a distributor or mutual fund expert for trading in different schemes.

According to the Association of Mutual Funds in India (AMFI), all intermediaries in the marketing and sale of mutual funds must have an ARN. The motto behind this is to protect and safeguard the interests of investors and other parties involved in the transaction. Moreover, it also helps to track the past investments made by the intermediaries on behalf of investors. To get an ARN, intermediaries must clear an exam conducted by the National Institute of Securities Markets (NISM) and then register with the Association of Mutual Funds in India (AMFI).

Definition and Purpose of ARN Number

The ARN number, also known as the Application Reference Number, is a unique identifier assigned to individuals or companies who want to sell mutual funds. The primary purpose of the ARN number is to ensure that only qualified and authorized distributors can sell mutual funds, thereby protecting the interests of investors. The ARN number serves as a badge of credibility and professionalism for mutual fund distributors, indicating their qualification and authorization to operate in the industry. By having an ARN number, distributors demonstrate their commitment to adhering to industry standards and providing reliable services to investors.

Importance of ARN Number in Mutual Fund Distribution

The ARN number plays a crucial role in mutual fund distribution, as it helps to prevent unauthorized selling of mutual funds. Only registered distributors with an ARN number can sell mutual funds, making it harder for scammers to cheat people. The ARN number also helps to monitor all mutual fund transactions by a distributor, ensuring fairness and clarity. Furthermore, distributors with an ARN number must follow a code of conduct, ensuring they give honest advice that helps investors. This system not only enhances the trust between investors and distributors but also promotes a transparent and ethical mutual fund market.

Who Can Apply for ARN Number?

As per SEBI and AMFI guidelines, the minimum age for a candidate to apply for ARN is 18. Additionally, the candidate must have cleared the NISM certification test and adhere to the code of conduct and other important guidelines.

The following are the eligible.

• Intermediaries, brokers, or agents
• Senior citizens who have completed Continuing Professional Education (CPE)
• Corporates engaged in the business of mutual funds

Eligibility and Requirements for Obtaining an ARN Number

Individuals or companies must meet certain eligibility criteria and requirements to obtain an ARN number. These include passing the NISM exam or completing Continuing Professional Education (CPE), following the rules, and agreeing to AMFI’s code of conduct for ethical behavior.

Applicants must also pay the required fees and renew the ARN number every few years to keep it active. Additionally, applicants must provide necessary documents such as proof of identity, proof of address, and educational qualifications. Meeting these requirements ensures that only qualified and ethical distributors are authorized to sell mutual funds, protecting investors’ interests.

How to Find ARN Number?

Merchants get ARN numbers from their payment providers. These numbers help track the status of a transaction, such as whether it’s still being processed or hasn’t yet been assigned. Here’s what the status information typically means:

• ARN is not available: This shows up when a refund is completed before the bank processes the charge. The payment provider reverses the authorization and removes the charge.
• ARN is processing: This means the refund process has started but isn’t finished yet.
• ARN is available: The Acquirer Reference Number (ARN) has been assigned to the refund and is now visible.

Documents Required for ARN Number in Mutual Funds

To obtain an ARN, applicants must submit the following documents:

• NISM certificate
• A photo identity card like an Aadhar card or PAN card
• Proof of bank account
• Two passport-sized photos

How to get an ARN Code?

You can apply for an AMFI Registration Number (ARN) both online and offline, making the process achievable and approachable.

The AMFI has been responsible for processing the registration and issuing the ARN to Computer Age Management Services Pvt. Ltd. (CAMS) on its behalf. Applicants can apply offline or online to get an ARN code.

• Intermediaries should fill out the Application Form for allotment of AMFI Registration Number (ARN), available online and at the AMFI and CAMS offices.
• Applicants should submit the application form and Know Your Distributor acknowledgment at the CAMS office. If unable to complete the KYD process, they must submit the KYD application form along with the ARN form.
• Applicants should submit two passport-size color photos and a copy of the NISM certification.
• The fee for individuals and proprietorship firms is Rs. 1,770, including GST. Fees and documentation differ for other entities, and one can take reference of the same on the AMFI website.

Benefits of ARN Code

For Investors

• It safeguards the interests of the investors, as a mutual fund distributor with AMFI will advise them on mutual fund investments.
• Investors can easily switch to any other mutual fund distributor if they are not satisfied with their current distributor of mutual funds. Their investments and assets will be transferred to other ARN holders. Additionally, they are no longer required to be related to their former distributor.
• Mutual fund distributors must also abide by moral standards set forth by the Association of Mutual Funds in India, which further protects investors and their financial assets.
• It assures investors that a distributor has NISM certification and good knowledge of mutual funds associated with them.
• It helps determine the intermediary’s brokerage.

For Mutual Fund Distributors

• It provides a unique identification code for each mutual fund distributor, adviser, or agent.
• The distributor becomes eligible to sell mutual funds to their clients legally.

Why is ARN good for both merchants and customers?

ARNs (Acquirer Reference Numbers) are valuable tools for merchants and customers. Here’s why they work well for everyone involved:

• Improved Customer Experience: ARNs make the refund process clear and easy to follow. Customers can track their refund status, reducing frustration and unnecessary communication. This helps ensure refunds are processed quickly and smoothly.
• Fraud Prevention: ARNs help detect and prevent fraud by acting as a unique identifier for each transaction. In cases like chargebacks, merchants can share the ARN with the bank to investigate and verify the transaction’s authenticity, protecting both parties from fraudulent activity.
• Better Efficiency: Managing transactions becomes simpler with ARNs. Instead of struggling to organize many payments, merchants can use ARNs to track each transaction. This saves time and helps streamline business operations.

Renewal Process of ARN Number

The ARN is valid for 3 years. ARN holders / EUIN holders should apply for the renewal of their ARN / EUIN cards 6 months before the expiration of the validity period.

If the renewal request is made before the expiry date of the ARN / EUIN, the validity period of the ARN / EUIN extends. On the other hand, if the renewal request is made after the expiry date, the validity period starts from the date on which the renewal application is submitted.

For corporate ARN holders, the registration letter extends for an additional three years starting on the day the renewal application is submitted.

Frequently Asked Questions

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