What is ARN Number in Mutual Funds?
ARN in Mutual Funds is an acronym for AMFI Registration Number (ARN). It is a unique number given to a distributor or mutual fund expert. It is given for trading in different schemes.
According to the Association of Mutual Funds in India (AMFI), it is mandatory for all intermediaries in the marketing and sale of mutual funds to 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. And 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).
Who Can Apply for ARN Number?
As per SEBI and AMFI guidelines, the minimum age of a candidate to apply for ARN is 18. Additionally, the candidate must also have cleared the NISM certification test and must 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
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?
The AMFI has given the responsibility of processing the registration and issuing the ARN to Computer Age Management Services Pvt. Ltd. (CAMS) on its behalf. And, applicants can either apply through offline mode or online mode to get an ARN code.
- Intermediaries should fill out the Application Form for allotment of AMFI Registration Number (ARN), which is available online as well as at the AMFI and CAMS offices.
- Applicants should submit the application form and Know Your Distributor acknowledgement 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 colour 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
- It safeguards the interests of the investors as a mutual fund distributor with AMFI will be advising them on mutual fund investments.
- Investors can very 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 a set of moral standards set forth by the Association of Mutual Funds in India. This further protects investors and their financial assets.
- It gives investors assurance that a distributor with NISM certification and good knowledge of mutual funds associates with them.
- It helps in determining the brokerage of the intermediary.
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.
Renewal Process of ARN Number
The ARN is valid for a period of 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 before the expiry date of the ARN / EUIN then the validity period of the ARN / EUIN extends. On the other hand, if the renewal request is after the expiry date, then the validity would start from the date on which one submits the renewal application.
In the case of Corporate ARN holders, the registration letter extends for an additional three years starting on the day the renewal application was submitted.
Frequently Asked Questions
The Association of Mutual Funds in India (AMFI) allots an ARN number to a mutual fund distributor so that they can help their customers in making investments in mutual fund schemes.
The validity of the ARN code is 3 years. Once it expires, one can renew it by filing an application for the same.
The minimum age to get an ARN is 18 years.
No. To apply for ARN, you must pass an exam conducted by the National Institute of Securities Markets (NISM).
No. As per AMFI, a distributor should not hold more than one ARN number.
Yes, the registered intermediaries can be de-registered due to the following reasons:
Breaking the rules & guidelines
Significant charges of offences by a judicial or regulatory authority.
A consumer court has upheld claims of severe carelessness.