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Understanding the Importance of ARN Number in Mutual Funds

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Understanding the Importance of ARN Number in Mutual Funds

Mar 22, 2024

15Mins

What is ARN Number in Mutual Funds?

An ARN (AMFI Registration Number) in Mutual Funds refers to a unique number issued to distributors or experts in the mutual fund industry. It is necessary for conducting trades in various schemes.

According to the Association of Mutual Funds in India (AMFI), possessing an ARN is mandatory for all intermediaries involved in marketing and selling mutual funds. The main objective behind this requirement is to safeguard the interests of investors and other parties involved in transactions. Additionally, having an ARN assists in tracking the previous investments made by intermediaries on behalf of investors. To acquire an ARN, intermediaries must clear an examination conducted by the National Institute of Securities Markets (NISM) and register with the Association of Mutual Funds in India (AMFI).

Who is Eligible to Apply for an ARN Number?

As per the guidelines provided by SEBI and AMFI, candidates applying for an ARN must be at least 18 years old. Additionally, they must have successfully cleared the NISM certification test and adhere to the code of conduct along with other relevant guidelines.

The following individuals and entities are eligible to apply for an ARN:

- Intermediaries, brokers, or agents

- Senior citizens who have completed Continuing Professional Education (CPE)

- Corporates engaged in the business of mutual funds

Documents Required for Obtaining an ARN Number in Mutual Funds

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

- NISM certificate

- Photo identification card such as an Aadhar card or PAN card

- Proof of bank account

- Two passport-sized photos

How to Obtain an ARN Code?

The responsibility of processing registrations and issuing ARN codes has been assigned by AMFI to Computer Age Management Services Pvt. Ltd. (CAMS). Applicants can apply for an ARN code via offline or online modes.

The steps to obtain an ARN code are as follows:

- 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 must submit the application form and an acknowledgement of Know Your Distributor (KYD) at the CAMS office. If the KYD process is incomplete, applicants must submit the KYD application form along with the ARN form.

- Two passport-size color photos and a copy of the NISM certification should be submitted.

- The fee for individuals and proprietorship firms is Rs. 1,770, including GST. Fees and documentation requirements may vary for other entities, and the AMFI website should be consulted for reference.

Benefits of Having an ARN Code

For Investors:

- It ensures the protection of investors' interests as a mutual fund distributor registered with AMFI provides guidance regarding mutual fund investments.

- Investors can easily switch to another mutual fund distributor if they are unsatisfied with their current one. Their investments and assets can be transferred to other ARN holders, and there is no obligation to remain connected to the former distributor.

- Mutual fund distributors are obligated to adhere to the ethical standards formulated by the Association of Mutual Funds in India. This provides further protection to investors and their financial assets.

- Investors can be assured that their distributor possesses NISM certification and expertise in mutual funds.

- It assists in determining the brokerage charged by intermediaries.

For Mutual Fund Distributors:

- It assigns a unique identification code to each mutual fund distributor, adviser, or agent.

- The distributor becomes eligible to legally sell mutual funds to their clients.

Renewal Process of ARN Number

An 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 prior to the expiration of the validity period.

If the renewal request is submitted before the expiry date, the validity period of the ARN/EUIN will be extended. If the renewal request is made after the expiry date, the validity will commence from the date of submission of the renewal application.

In the case of Corporate ARN holders, the registration letter will be extended for an additional three years starting from the day the renewal application was submitted.

What is ARN Number in Mutual Funds?

An ARN (AMFI Registration Number) in Mutual Funds refers to a unique number issued to distributors or experts in the mutual fund industry. It is necessary for conducting trades in various schemes.

Who is Eligible to Apply for an ARN Number?

The following individuals and entities are eligible to apply for an ARN:

- Intermediaries, brokers, or agents

- Senior citizens who have completed Continuing Professional Education (CPE)

- Corporates engaged in the business of mutual funds

Documents Required for Obtaining an ARN Number in Mutual Funds

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

- NISM certificate

- Photo identification card such as an Aadhar card or PAN card

- Proof of bank account

- Two passport-sized photos

How to Obtain an ARN Code?

The steps to obtain an ARN code are as follows:

- 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.

- Two passport-size color photos and a copy of the NISM certification should be submitted.

Benefits of Having an ARN Code

For Investors:

- It ensures the protection of investors' interests as a mutual fund distributor registered with AMFI provides guidance regarding mutual fund investments.

- Investors can be assured that their distributor possesses NISM certification and expertise in mutual funds.

- It assists in determining the brokerage charged by intermediaries.

For Mutual Fund Distributors:

- It assigns a unique identification code to each mutual fund distributor, adviser, or agent.

- The distributor becomes eligible to legally sell mutual funds to their clients.

Renewal Process of ARN Number

An 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 prior to the expiration of the validity period.

In the case of Corporate ARN holders, the registration letter will be extended for an additional three years starting from the day the renewal application was submitted.