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CODE OF CONDUCT
Overview
SEBI vide its Circular SEBI / IMD / CIR No. 8 / 174648 / 2009 dated September 23, 2009 has advised that all intermediaries of mutual funds units shall follow the code of conduct strictly. If any intermediary does not comply with the code of conduct, the mutual fund shall report it to AMFI and SEBI. No mutual fund shall deal with those intermediaries who do not follow code of conduct.
Code of Conduct for Intermediaries of Mutual Funds
The salient features of an ARN are:
01
Prioritize investor interests and protect them in all circumstances.
02
Follow SEBI regulations on mutual fund distribution, advertising, and sales practices.
03
Know key scheme documents (SID, SAI, KIM) and comply with SEBI guidelines for promotions.
04
Summarize schemes, highlight risks, and suggest products tailored to the investor’s needs.
05
Disclose commissions received and avoid assuring returns unless specified in the SID.
06
Maintain infrastructure to support AMCs and ensure timely transactions.
07
Steer clear of fraud like misrepresenting schemes or splitting applications.
08
Keep up with industry developments and ensure up-to-date information for investors.
09
Maintain confidentiality and prioritize the investor’s financial suitability, not commission incentives.
10
Do not offer rebates or gifts to attract investors.
11
Verify investor details and avoid fraudulent or incorrect information on applications.
12
Ensure all sales personnel obtain NISM certification and EUIN, and comply with KYD norms.
13
Work with AMCs and regulators to ensure AML/KYC compliance.
14
Adhere to AMFI’s code of conduct and maintain high ethical standards in all dealings.
15
Refund clawed-back commissions as per SEBI and AMC terms.
16
Avoid fraudulent or misleading practices in selling mutual fund schemes.
SID should be read in conjunction with SAI, and not in isolation.
