AMFI launches internship scheme for mutual fund distributors

The internship scheme is being conducted under a regulatory sandbox project approved by the Securities and Exchange Board of India (SEBI) to increase the number of individual MFDs in the country.

The internship scheme is targeted for fresh graduates, educated but unemployed persons, especially those who have lost their jobs and earnings due to the COVID-19 pandemic, retirees, women and housewives, who have taken a mid-career break to take care could. Their youth, and all those who now want to start their own venture as self-employed entrepreneurs.

The internship will be sponsored by individual mutual fund houses. Individuals desirous of becoming MFDs under the scheme will have a special panel and tie up with a specific ‘sponsor’ asset management company (AMC) for a period of 12 months.

During this period, Apprentice MFDs are supported by the Sponsor AMC to obtain the required NISM certification, Amphi Registration Number (ARN), operational set-up, training on operational aspects and customer acquisition as well as a stipulated monthly stipend Will go 15,000 for a maximum period of 12 months.

Apprentice MFD will be empaneled with only one sponsor AMC during the period of apprenticeship, but will be free to empanel with more AMCs after completion of this initial period.

As per the extant SEBI regulations, AMCs can pay only trail commission to the distributors and no advance commission is allowed. Although the trail commission model removes any incentives for investment keeping in mind the interests of investors, distributors and AMCs, it takes a few years to build up a large AUM which is exclusively through trail commission for new ones. can provide a fair amount of subsistence income. entrant

As part of the regulatory sandbox initiative, SEBI has accepted the request of AMFI for relaxation of the above conditions, so that the AMC can give reasonable stipend to the trainee MFD for a maximum period of 12 months during the initial stage of his/her career. MFD creates permanent subscriber and AUM.

AMFI President A Balasubramaniam said: “When we released the AMFI BCG ‘Unlocking the’ 100 Trillion Opportunity Whitepaper, we envisioned to increase the mutual fund distributor base from around 1 lakh distributors to 5 lakh distributors. Thanks to SEBI’s regulatory sandbox, we want to add around 5,000 Apprentice MFDs this year, who will be trained and supported by the industry, till they are ready on their own. ,