After the notification of the SEBI Investment Adviser (Amendment) Regulations, 2020 on 3rd July, 2020, the Association of Mutual Funds in India (“AMFI”) has issued guidance regarding nomenclature to be used by Registered Mutual Fund Distributor.
As per the said Regulations, no distributor shall use the nomenclature “Independent Financial Adviser or IFA or Wealth Adviser or any other similar name”.
Since, there was lot of confusion regarding ‘similar name’, so AMFI has come up with the list of names which are permissible and not permissible.
So, the existing mutual fund distributor who have similar names shall apply for changing its name before 31st October, 2020 as the AMFI has extended the timeline for changing the name from 15th October, 2020 to 31st October, 2020.
If still any mutual fund distributor has any doubt pertaining to its name, then he/she can write to AMFI via email to email@example.com
Further, AMFI has specified that registered Mutual Fund Distributor shall clearly specify that he/she is acting as a MFD and shall also mention the following tagline, “AMFI-registered Mutual Fund Distributor” with their name.
The name and tagline shall be mentioned/displayed in all forms of communication i.e. website, mobile app, printed or electronic materials, business card, sign board etc. in a clear and legible font of at least font size 12.
Text of the AMFI Guidance on MFD Nomenclature is as follows:-
AMFI GUIDANCE ON MFD NOMENCLATURE
(Pursuant to Regulation 3(3) of the SEBI (Investment Advisers) Regulations, 2013
As per Regulation 3(3) of the SEBI (Investment Advisers) Regulations, 2013 notified on July 3, 2020 –
No person, while dealing in distribution of securities, shall use the nomenclature “Independent Financial Adviser or IFA or Wealth Adviser or any other similar name” unless registered with SEBI as an Investment Adviser.
Pursuant to the above regulatory amendment, mutual fund distributors (MFDs) whose registered name has the terms such as Adviser / Advisor / Financial Adviser/ Investment Adviser/ Wealth Adviser/Wealth Manager/Wealth Managers etc. are required get their registered name changed.
SEBI has also clarified that –
a. The name of an MFD should reflect the registration held by the entity and should not in any way create an impression of performing a role for which the entity is not registered. Thus, every MFD, while dealing in distribution of securities, should clearly specify that he /she is acting as a MFD.
b. MFD’s Name and Tagline, should be placed together in a clear and legible font size. The same disclosure should be followed in all forms of communication i.e. website, mobile app, printed or electronic materials, business card, sign board etc.
c. The timeline for making application to RoC for change in name has been extended from October 15,2020 to October 31, 2020. The same timelines will apply for MFDs established as proprietary/partnership firms.
LIST OF PERMISSIBLE / NON-PERMISSIBLE NAMES
Since the aforesaid regulation covers a wide range of ‘other similar names/ terms’ that may not be permissible, AMFI has been receiving requests from MFDs for providing guidance as to which names/terms are allowed.
In this regard, AMFI has drawn up a list of names as per Annexure, which in AMFI’s view, are permissible / acceptable, as well as list of names/ terms that are not permissible, for broad guidance of the MFDs.
MFDs are advised to make sure that their name is in line with the above list.
However, it may please be noted that the lists are only illustrative and not exhaustive. If the proposed name of any MFD is not included in the aforesaid list of permissible / non-permissible names, the concerned MFD may write to AMFI via email to firstname.lastname@example.org
3. MANDATORY TAGLINE TO BE MENTIONED BY MFDs WITH THEIR NAME
As mentioned above, SEBI has also advised that MFD should display their name and tagline in a clear and legible font in all forms of communication i.e. website, mobile app, printed or electronic materials, business card, sign board etc.
In this regard, all MFDs are advised to mention/display a tagline, “AMFI-registered Mutual Fund Distributor” alongwith / below their name, in a clear and legible font of atleast font size 12, in all forms of printed communication so as to ensure compliance with the above requirement.
LIST OF ACCEPTABLE & NON-PERMISSIBLE NAMES
|Sr. No.||Acceptable Names|
|2||XYZ Asset Distribution|
|3||XYZ Asset services|
|5||XYZ Capital distribution|
|6||XYZ Capital Services|
|7||XYZ Edge Distribution|
|8||XYZ Edge Investment|
|11||XYZ Finance! Financial|
|12||XYZ Financial Distribution|
|13||XYZ Financial Investment|
|14||XYZ Financial Services|
|16||XYZ Finserve ! Finserv|
|18||XYZ Fundmart! Fundsmart|
|21||XYZ Investment Services|
|23||XYZ Investor Services|
|24||XYZ Investor Shoppee|
|25||XYZ Ltd. ! XYZ LLP|
|26||XYZ MF services|
|28||XYZ Money services|
|30||XYZ Mutual Fund Distribution! Mutual Fund Distributors|
|31||XYZ Mutual fund services|
|33||XYZ Prime Distributors ! Distribution|
|34||XYZ Prime Investment!s|
|35||XYZ Prime Wealth|
|37||XYZ Securities Distribution|
|Sr.No.||Not acceptable Names|
|2||XYZ Advisory Services|
|3||XYZ Capital Adviser|
|4||XYZ Capital Management|
|5||XYZ Consultancy Services|
|8||XYZ Corporate Advisory|
|9||XYZ Financial Consultancy|
|10||XYZ Financial Consultancy Services|
|11||XYZ Financial Consultant/s|
|12||XYZ Financial Consulting|
|13||XYZ Financial Planner/s|
|14||XYZ Financial Planning|
|15||XYZ Financial Solutions|
|19||XYZ Fund Adviser|
|21||XYZ Independent Financial Adviser|
|22||XYZ Investment Consulting|
|23||XYZ Investment Adviser|
|24||XYZ Investment Consultancy|
|25||XYZ Investment Consultancy Services|
|26||XYZ Investment Consultant/s|
|27||XYZ Investment Manager/s|
|28||XYZ Investment Planners|
|29||XYZ Investment Solutions|
|30||XYZ Money Manager|
|31||XYZ Multi Wealth Investments|
|34||XYZ Wealth Adviser/s or Wealth Advisor/s|
|35||XYZ Wealth Advisory|
|36||XYZ Wealth Advisory Services|
|37||XYZ Wealth Care|
|38||XYZ Wealth Chanakya|
|39||XYZ Wealth Consultancy|
|39||XYZ Wealth Consultants|
|40||XYZ Wealth Consulting|
|41||XYZ Wealth Creator/s|
|42||XYZ Wealth Express|
|43||XYZ Wealth Investments|
|44||XYZ Wealth Mall|
|45||XYZ Wealth Management|
|46||XYZ Wealth Manager|
|47||XYZ Wealth Planner|
|48||XYZ Wealth Plus|
|49||XYZ Wealth Services|
|50||XYZ Wealth Solution/s|
|51||XYZ Wealth Vision|
|52||XYZ Wealth Yantra|