New AMFI Guidelines for Investors Data

SEBI recommendation

New AMFI Guidelines for Investors Data

AMFI’s Recommendations 20 March, 2019

Introduction

New AMFI (Association of Mutual Funds In India) Guidelines for Investors Data state a Standard Process for Capturing/Updating Investors’ Email Address & Mobile No. against their folios maintained by AMCs/ RTAs.

SEBI in its letter dated July 9, 2018 regarding the inspection of mutual funds, addressed to AMFI following points –

  1. Invalid Email IDs of RTAs ( Registrar or Transfer Agents) in place of investors’ IDs deprives the investors of information which is required to be shard with them.
  2. It has also resulted into violation of confidentionality of information pertaining to the investors.

As per AMFI’s Code of Conduct, mutual fund distributors must ensure that the investor’s address and contact deatils filled in mutual fund application form are investor’s own details and not of any third party. Mutual fund distributors should prevent from filling information of their own or of their employees as the investor’s contact details in the application form, even if it is requested by the investor to do so.

AMFI Guidelines

AMFI's Best Practice Guidelines
AMFI’s Best Practice Guidelines

In accordance with the background mentioned above, AMFI’s Operations & Compliance Committee has recommended a Standard Process for Capturing/Updating Investors’ Email Address & Mobile No. against their folios in the Unit Holder’ Register (UHR) maintained by AMCs/ RTAs.

Accordingly, all AMCs are requested to take note of the following guidelines and take the necessary steps to implement the same.

AMFI Guidelines with respect to New Customers

  1. In respect of New Customers (Investors who do not have any folio with the MF), the email address and mobile no. as provided in the application form or the transaction feed file reveived from Srock exchange/Channel Partners/Registered Investment Advisors shall be captured.
  2. In case where the email ID and mobile no are not provided in the application form or not available in the transaction feed file. The same details of sole/first applicant should be taken as per the KYC data.
  3. If contact details are not available in the KYC data also, then a letter should be sent to the customer alongwith a KYC change request form with the request to provide the same to the AMCs, duly completed.
  4. AMCs/RTAs should make continous follow up effort to collect email IDs and mobile numbers of the sole/first holder via KYC Change Request Form, by sending periodic reminders.
  5. As a general rule, the email address of one investor should not be allowed/updated against folios of other/multiple investors unless the investors in such folios belong to the same family(Family means self, spouse, dependent children, dependent parents)

AMFI Guidelines WITH RESPECT TO Existing CUSTOMERS

  1. In respect of existing customers (who already have a folio with MF), AMCs are advised to carry out a thorough exercise of identifying the folios wherein-
  • Email ID is invalid or has not been provided at all or
  • Emai ID of the RTA has been filled or
  • Same Email ID and/or mobile no has been provided against folios of multiple investors who don’t belong to the same ‘family'( as is apperant from name and address) or
  • Email ID and/or mobile no related to distributor through whom the investment was made

2. In case where the email ID and mobile no are not provided in the application form or not available in the transaction feed file. The same details of sole/first applicant should be taken as per the KYC data.

3. In all such cases, where AMCs at the first face find that the email ID / mobile no provided in the application form/ transaction feed file is not of actual investor or incorrect or doubtful, AMCs should take following actions-

  • Arrange to delete the existing email ID / mobile number
  • Check & fill the email ID / mobile number of the primary holder from the KYC data
  • Send a suitable intimation to the concerned investor and distributor about the actions taken as above
  • Request the investor and the distributor to provide investors’ own mobile no and email ID through KYC Request Form if such details are not available in the KYC data
  • AMCs/RTAs should make continous follow up effort to collect email IDs and mobile numbers of the sole/first holder via KYC Change Request Form, by sending periodic reminders.

Communication

All communication via email/SMS should necessarily be sent to the email ID/ mobile number of the sole/primary holder.

Implementation Timelines

AMCs are advised to implement the above-mentioned guidelines and processes at the earliest, but latest by June 1, 2019.

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