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MFD PLAYBOOK · VOLUME 3

Compliance-first MFD Practice

Every rule an AMFI-registered Mutual Fund Distributor works under — in plain English, each one tied to the circular it comes from.

Rules as on 29 October 2026
Draft by Deepak Singla · AMFI-registered Mutual Fund Distributor (ARN-76535) · 9 chapters · 92 rules, each with its source
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READ THIS FIRST
  • Rules as on 29 October 2026. A later circular overrides anything here.
  • This is a working summary, not the law. When a decision matters — a client complaint, a renewal, a name change, a new platform — read the circular itself (Appendix B lists every one, with its date).
  • It is not legal, tax or investment advice. Draft by Deepak Singla, an AMFI-registered Mutual Fund Distributor (ARN-76535). Not issued or reviewed by AMFI, SEBI or NISM.

This volume lists the rules a mutual fund distributor (MFD) in India works under, as they stand on 29 October 2026. It is written for an individual MFD or a small firm, not for a compliance department.

Every rule is followed by its source: the regulation or circular, its paragraph, and its date. Where a point is practical advice rather than a rule, it is marked as such, in the "Do" and "Don't" lists.

Rules change. 2026 alone brought new Mutual Fund Regulations (from 1 April), a new SEBI Master Circular (20 March), new nomination norms (1 September), a social-media disclosure rule (1 May) and a new certification for SIF distribution (21 July). When you read this, check Appendix C and the AMFI and SEBI websites for anything newer.

Chapter 1

Distributor, not adviser

The single most important line in Indian mutual fund regulation, for an MFD, is the line between distributing a product and advising a client for a fee. Everything about your name, your plans and your pay follows from which side of it you stand on.

The rules

  • An AMFI-registered mutual fund distributor does not need SEBI registration as an Investment Adviser for advice that is incidental to distributing mutual funds to its clients.SEBI (Investment Advisers) Regulations, 2013 (as amended up to 25 Nov 2025), reg. 4(d)
  • Anyone who gives investment advice for consideration is an "investment adviser" and must be registered with SEBI. Only a registered Investment Adviser is entitled to charge a fee for advice.SEBI (Investment Advisers) Regulations, 2013 (as amended up to 25 Nov 2025), reg. 2(1)(m), 3(1) and 15A
  • An individual Investment Adviser cannot provide distribution services, and the IA's family cannot distribute to the clients the IA advises. A non-individual adviser must keep advisory and distribution clients separate at group level: the same client cannot be offered both.SEBI (Investment Advisers) Regulations, 2013 (as amended up to 25 Nov 2025), reg. 22
  • No person dealing in distribution of securities may call itself "Independent Financial Adviser", "IFA", "Wealth Adviser" or any similar name unless registered with SEBI as an Investment Adviser. Names containing Adviser, Advisor, Financial Adviser, Investment Adviser, Wealth Adviser, Wealth Manager or Consultant are not permitted for an MFD.SEBI (Investment Advisers) Regulations, 2013 (as amended up to 25 Nov 2025), reg. 3(3); AMFI Master Circular for MFDs (14 Jan 2026), paras 1.3.1-1.3.2 and Code of Conduct 5(g)
  • AMFI publishes illustrative lists of acceptable and unacceptable names. Acceptable examples include "XYZ Investments", "XYZ Financial Services", "XYZ Mutual Fund Distributors", "XYZ Securities" and "XYZ Wealth". Unacceptable examples include "XYZ Advisory", "XYZ Consultants", "XYZ Financial Planning", "XYZ IFA", "XYZ Wealth Management", "XYZ Wealth Manager", "XYZ Investment Solutions" and "XYZ Money Manager". If your name is not on either list, write to contact@amfiindia.com.AMFI Master Circular for MFDs (14 Jan 2026), para 1.3.4 and Appendix (List of Permissible and Non-permissible Names)
  • Your name must not create an impression that you perform a role you are not registered for, and you must tell every client clearly that you are acting as a mutual fund distributor.AMFI Master Circular for MFDs (14 Jan 2026), para 1.3.5
  • Show the tagline "AMFI-registered Mutual Fund Distributor" with or below your name and ARN, in a clear font of at least size 12 in all printed communication, and with your name in all other communication: website, app, business card, sign board, electronic material.AMFI Master Circular for MFDs (14 Jan 2026), para 1.3.6
  • If you act as an MFD for a client, you cannot deal in Direct Plans for that client. A non-individual IA, portfolio manager or stock broker that distributes to a client can offer that client only Regular Plans; one that advises a client can invest only in Direct Plans for that client and earns no commission from AMCs.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 9 (SEBI letter of 6 Sep 2021); AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(f)
✓ Do
  • Check your registered firm name, letterhead, visiting card, shop board, website and WhatsApp profile against AMFI's list today.
  • Say "Mutual Fund Distributor" in your introduction, on your card and in your email signature.
  • If a client asks for advice you would want to be paid for separately, tell them that needs a SEBI-registered Investment Adviser.
✗ Don't
  • Don't call yourself an adviser, wealth manager, planner or consultant — in your name, bio or posts.
  • Don't charge a client a separate "advice fee" or "planning fee" as an MFD. (Practical reading of reg. 2(1)(m) and 15A: a fee for advice is what makes someone an investment adviser.)
  • Don't place Direct Plan transactions for a client whose Regular Plan investments you hold.
PENDING — WATCH THIS SPACE
  • In 2026 SEBI set up a working committee to review the scope of advice an MFD may give and the overlap with registered Investment Advisers; in August 2026 a SEBI official said SEBI would clarify what each may do (press reports, e.g. Cafemutual, 5 Aug 2026). As on 29 October 2026 we found no consultation paper or circular. When one is issued, this chapter changes first.
Checklist for this chapter
Chapter 2

Your registration: NISM, ARN and EUIN

Three things let you sell a mutual fund in India: a valid NISM certificate, an AMFI Registration Number (ARN), and empanelment with that fund house. Your staff who talk to clients need their own certificate and an Employee Unique Identification Number (EUIN).

Getting registered

  • Every person who sells or markets mutual fund units — distributors, agents, brokers, sub-brokers, and anyone they employ for selling — must pass NISM Series V-A (Mutual Fund Distributors Certification) and register with AMFI to obtain an ARN.AMFI Master Circular for MFDs (14 Jan 2026), para 1.1.1; SEBI Master Circular for Mutual Funds (20 Mar 2026), paras 16.1-16.2
  • Since 21 July 2026, NISM Series V-D (Mutual Fund — Specialized Investment Fund Distributors Certification) is also accepted: it lets the holder distribute both mutual funds and SIFs without holding V-A separately. Distributors of mutual funds only continue with V-A.SEBI circular HO/24/13/17(1)2026-IMD-POD-1/I/16895/2026 (21 Jul 2026), paras 21.10.1-21.10.2; AMFI CIR/ARN-33/2026-27 (28 Jul 2026)
  • A non-individual (company, LLP, partnership, HUF) needs at least one employee with a valid NISM certificate and EUIN mapped to its ARN. An HUF-owned proprietorship counts as a non-individual; an individual's proprietorship counts as the individual, who must hold the certificate and EUIN personally.AMFI Master Circular for MFDs (14 Jan 2026), paras 1.1.2 and 1.9.2
  • Applications for ARN and EUIN are online only, through the AMFI website; CAMS processes them for AMFI. An individual applicant must be at least 18. The ARN is linked to your PAN and cannot be transferred.AMFI Master Circular for MFDs (14 Jan 2026), paras 1.2.1-1.2.3 and 1.5 notes
  • Know Your Distributor (KYD) is required at registration: Aadhaar and PAN, or a KYC Validated status with a KRA.AMFI Master Circular for MFDs (14 Jan 2026), para 1.4
  • An ARN alone does not let you sell a fund house's schemes. You must be empanelled with each AMC. Business under an ARN that is not empanelled is processed in the Direct Plan.AMFI Master Circular for MFDs (14 Jan 2026), para 4.1.1
  • You may appoint sub-distributors only if they hold a valid ARN, and you are responsible and accountable for their acts.AMFI Master Circular for MFDs (14 Jan 2026), paras 4.2.1-4.2.3; AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 2(h)

Fees (plus GST)

  • Route through NISM V-A, mutual funds only: individual or proprietorship ₹3,000 to register, ₹1,500 to renew; employee EUIN ₹1,500 / ₹750; partnership firm ₹20,000 / ₹10,000; private limited company, OPC or LLP ₹40,000 / ₹20,000.AMFI Master Circular for MFDs (14 Jan 2026), Appendix (AMFI Registration and Renewal fees)
  • Combined MF + SIF registration on the basis of NISM V-D, from 22 July 2026: individual ₹5,000 / ₹3,000; proprietorship ₹6,000 / ₹3,000; employee EUIN ₹3,000 / ₹1,500; partnership ₹40,000 / ₹20,000; private limited company, OPC or LLP ₹80,000 / ₹40,000.AMFI CIR/ARN-33/2026-27 (28 Jul 2026)

Staying registered

  • ARN and EUIN are valid for 3 years. An individual's ARN or EUIN is co-terminus with his or her NISM certificate, and can be renewed only after the NISM certificate is renewed. You may renew up to 6 months before expiry; CAMS sends reminders from 6 months before.AMFI Master Circular for MFDs (14 Jan 2026), paras 1.10.1-1.10.6
  • The NISM V-A certificate is valid for 3 years from the date of the examination. It can be renewed by passing the exam again or by attending NISM's one-day CPE programme, which can be taken only in the final year of the certificate's validity.NISM, Frequently Asked Questions — Mutual Fund Distributors (page updated 16 Jan 2026)
  • If your ARN expires: it is invalid from the next day, you cannot sell, trail on earlier business is withheld, and new business goes into the Direct Plan. Renew within 3 months and the withheld trail is released; renew later and it is forfeited. Trail on pre-expiry business resumes only from the date of renewal.AMFI Master Circular for MFDs (14 Jan 2026), para 5.3
  • Tell the AMC and AMFI promptly about any change in your status, constitution, address or contact details.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 5(d)
  • Individual MFDs can register a nominee with AMCs; on the MFD's death, trail on business already procured goes to the nominee or legal heir until the investor changes distributor or redeems. The nominee or heir can move the clients to his or her own valid ARN, with investor consent, by applying within 12 months of the death.AMFI Master Circular for MFDs (14 Jan 2026), paras 5.5 and 6.6.3(f)
✓ Do
  • Put three dates in your calendar now: NISM certificate expiry, ARN expiry, and "start renewal" 6 months before.
  • Register your own nominee with the AMCs — your family's trail income depends on it.
  • Keep a list of every staff member who talks to clients, with their NISM and EUIN expiry dates.
✗ Don't
  • Don't let anyone without a valid certificate and EUIN talk to clients about schemes.
  • Don't submit business for an AMC you are not yet empanelled with.
Checklist for this chapter
Chapter 3

Your compliance calendar

Most compliance failures are missed dates, not bad intentions. These are the dates that recur.

Every year

  • By 30 June: submit the annual Declaration of Self-Certification (DSC) online to AMFI, certifying that you followed the regulatory guidelines and the Code of Conduct in the year ended 31 March. Individuals and proprietors submit it themselves; for a non-individual MFD, the authorised signatory does.AMFI Master Circular for MFDs (14 Jan 2026), paras 11.2-11.2.2 (Ch. 10)
  • If the DSC is not in by 30 June, commission accrued from 1 July is withheld until it is submitted. If it is not in by 30 September (the grace period), the withheld commission is forfeited.AMFI Master Circular for MFDs (14 Jan 2026), paras 11.2.3 and 11.3
  • Principal MFDs must collect the DSC in the prescribed format from their sub-distributors.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 10, note to para 11.2

Every three years

  • NISM certificate: renew through the CPE programme in its final year, or re-pass the exam, before it lapses. Then renew the ARN and EUINs online, up to 6 months before they expire.NISM FAQ (16 Jan 2026); AMFI Master Circular for MFDs (14 Jan 2026), paras 1.10.2-1.10.4

Whenever something changes

  • Inform the AMC and AMFI of any change in status, constitution, address or contact details.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 5(d)
  • Notify the AMC and AMFI in writing if a representative commits an act of moral turpitude or financial irregularity, is arrested, or is dismissed for such acts.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 5(f)
  • Refund to AMCs any commission that is subject to clawback.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 5(e)
A SIMPLE YEARLY CALENDAR
  • April: start the year — list every staff EUIN and certificate expiry.
  • By 30 June: DSC submitted (yours, and collected from sub-distributors).
  • 30 September: last day of the DSC grace period — after this, withheld commission is lost.
  • Twice a year (after the half-yearly CAS, issued by the 21st of the month after September and March): read the commission your clients see against your name.
  • 6 months before any expiry: renew NISM, then ARN/EUIN.
Checklist for this chapter
Chapter 4

How you are paid — and what you must disclose

An MFD is paid by the fund house, out of the scheme, as trail commission. The rules on how that money may flow, and what the client must be told about it, are strict and specific.

Commission

  • AMCs pay trail commission only, in money, under a full-trail model. There is no upfront commission and no upfronting of trail, directly or indirectly, in cash or kind, through sponsorships or any other route.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 11.5.1; AMFI Master Circular for MFDs (14 Jan 2026), para 5.1.2
  • One exception: for SIPs of investors who are new to mutual funds (identified by PAN), trail may be paid up to 1% a year in advance for up to 3 years, on SIPs of up to ₹3,000 a month per scheme, only on the investor's first SIP(s). It is paid from the AMC's books and recovered from the distributor pro rata if the SIP stops early.SEBI Master Circular for Mutual Funds (20 Mar 2026), paras 11.5.1-11.5.3
  • Since 1 March 2026, AMCs pay an additional incentive for new individual investors (new PAN) from beyond the top 30 cities (B-30), and for new women investors from any city: 1% of the first lump sum (maximum ₹2,000, if the investor stays invested at least a year) or 1% of the first year's SIP investment (maximum ₹2,000). It is on top of trail, subject to clawback, and not payable twice for the same investor. ETFs, domestic fund of funds investing over 80% in domestic funds, and overnight, liquid, ultra-short and low-duration funds are excluded.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 11.6 (SEBI circular HO/(83)2025-IMD-POD-1/I/152/2025, 27 Nov 2025; start date 1 Mar 2026)
  • Transaction charges (₹100/₹150 per investment, deducted from the investor's money for the distributor) were discontinued on 8 August 2025. An investor whose transaction you handle on an "execution only" basis pays you nothing.SEBI circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/115 (8 Aug 2025); SEBI Master Circular for Mutual Funds (20 Mar 2026), para 16.6.1(d)(ii)(III)
  • You earn commission only if a valid ARN and a valid EUIN mapped to it are quoted on the Regular Plan transaction. A missing or invalid EUIN must be corrected within 30 days, or that commission is forfeited permanently.AMFI Master Circular for MFDs (14 Jan 2026), paras 5.2.1-5.2.3
  • Your own investments, including folios where you are the first holder, earn no commission. Taking commission on your own investment is a violation.AMFI Master Circular for MFDs (14 Jan 2026), paras 5.1.1 and 5.1.3
  • Pay your sub-distributors only trail commission, in money with an audit trail — never in gifts or kind.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 8, para B.1

What you must never do with money

  • Do not rebate or pass back commission to investors, and do not attract investors with gifts, vouchers or other inducements.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 1(d)
  • Do not churn, split applications to earn higher commission, take part in payment defaults, make false claims about payouts, or sell unsuitable products through misleading statements.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 1(e)
  • Do not run competitive contests or incentive programmes that promote selected schemes. Training or recognition programmes for your staff and sub-distributors must be in India, at a reasonable cost, and never at an exotic destination or abroad.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 8, paras B.2-B.4

Disclosure to the client

  • Disclose to the investor all commissions — trail or any other mode — payable to you for the competing schemes from among which you recommend one.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 11.5.6; AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(c)
  • Tell clients which mutual funds you are empanelled with, that your information covers only the products you distribute, and that they may consider other products too. If you are an associate of an AMC, disclose that link and the total commission.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(d)-(e); SEBI Master Circular for Mutual Funds (20 Mar 2026), para 16.6.1(d)(iv)
  • On any digital platform you offer, state plainly that the investor is buying a Regular Plan which pays you commission, link prominently to your commission rates for competing schemes, and link to the scheme documents (SID, SAI, KIM).AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(f)
  • Your client will see it anyway: the half-yearly Consolidated Account Statement shows, scheme by scheme, the actual commission (in rupees, including the value of any gifts, trips or event sponsorships) paid to the distributor on that client's investment.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 15.7.4(e); SEBI (Mutual Funds) Regulations, 2026, reg. 34
✓ Do
  • Keep a one-page commission-rate sheet for the schemes you offer, and show it before the client chooses.
  • Explain the half-yearly CAS commission line to clients before they see it — it builds trust instead of surprise.
✗ Don't
  • Don't offer cashback, gifts, insurance-cover freebies or "first SIP on me" to win a client.
  • Don't switch a client between schemes to restart or raise commission.
Checklist for this chapter
Chapter 5

At the point of sale

The Code of Conduct calls an MFD a fiduciary: the investor's interest comes first. In practice that means knowing the client, knowing the scheme, saying what the risks are, and never promising a return.

Suitability and risk

  • Put the investor's interest first; avoid conflicts of interest and disclose those you cannot avoid; never let incentives drive a recommendation.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 1(a)-(c)
  • Gather information about the investor's financial status, investment experience and objectives, and consider suitability before suggesting a scheme.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 2(d)
  • Understand the SID, SAI and KIM of what you sell; give investors full, updated information supplied by the AMC; never withhold a material fact, including that a scheme or transaction is not appropriate for them.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 2(c) and 4(a)
  • Highlight each scheme's risk factors, make no exaggerated statement, and urge investors to read the SAI, SID and KIM before investing. Draw attention to market risk and loss of capital, possible suspension of redemptions, NFO risks, and the possibility of a scheme being wound up.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(b) and 4(l)
  • Never provide an indicative portfolio, indicative yield or indicative return for any scheme, and never indicate or assure returns. This is also a SEBI rule for distributors.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(g); SEBI Master Circular for Mutual Funds (20 Mar 2026), para 14.4.1
  • If you also sell products with assured returns (fixed deposits, bonds, insurance), never sell a mutual fund on the strength of an assured or regular income. Explain that mutual funds are not guaranteed and the principal can be lost.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(h)
  • Make comparisons only with similar, comparable schemes or products, with complete facts.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(m)

If you are a large distributor

AMCs must run due diligence on distributors that meet any one of these: presence in more than 20 locations; non-institutional AUM (including HNIs) over ₹100 crore across the industry; commission over ₹1 crore a year across the industry; or over ₹50 lakh from a single mutual fund.

  • Such a distributor must classify every client relationship and transaction as either "advisory" (where it represents that it offers advice, and may then sell only what is appropriate to the client's risk category, with no exceptions) or "execution only". There is no third category.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 16.6.1(b) and (d)
  • For an execution-only transaction you believe is not appropriate for the investor, write to the investor saying so, get that acknowledged, and obtain the investor's confirmation that the transaction is execution-only before executing it. The investor pays the distributor nothing for it.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 16.6.1(d)(ii)
  • Keep customer risk evaluation and scheme-appropriateness decisions separate from sales staff, and have defined processes for product review, client risk profiling, grievance handling, staff training and audit.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 16.6.1(c)(iv) and (e)
✓ Do
  • Record, for every new client, a short risk profile and the reason a scheme suits them — signed or confirmed on WhatsApp/email.
  • Show the scheme's riskometer and say in one sentence what it means.
  • When a client insists on something unsuitable, put your concern in writing and keep their acknowledgement.
✗ Don't
  • Don't say "safe", "guaranteed", "assured", "FD jaisa" or "pakka return" about any mutual fund.
  • Don't show a "this will become ₹X" figure as a promise. A projection must state the rate used and that it is an illustration.
  • Don't compare an equity fund with an FD or a policy as if they carry the same risk.
Checklist for this chapter
Chapter 6

Forms, KYC, nomination and payments

Most regulatory action against distributors starts with paperwork: a contact number that is not the investor's, a form changed after signature, a payment from someone else's account.

The application form

  • Fill every form with the investor's own, accurate and complete details. Never put your own, your staff's or any third party's address, email or mobile number on an investor's form — even if the investor asks you to.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(i)(i)
  • A folio may carry another person's email or mobile only for these relationships, with a declaration: spouse, dependent children, dependent siblings, dependent parents, guardian, POA holder, PMS or custodian.AMFI Best Practice Guidelines circular No. 97/2021-22 (28 Mar 2022), as reproduced by AMCs (AMFI original not re-read for this edition)
  • Change an investor's contact details only on the investor's (or authorised person's) own instruction; never insert, delete or modify anything on a form the investor has signed; write the EUIN of the employee who dealt with the investor on the form.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(i)(ii)-(iv); SEBI Master Circular for Mutual Funds (20 Mar 2026), para 16.11
  • Attest investor documents diligently and carry out In-Person Verification (IPV) where required.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 2(b)

KYC

  • A client whose PAN, name and address cannot be verified by the KYC Registration Agency (KRA) cannot transact further in the securities market until they are verified.SEBI circular SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 (11 Aug 2023)
  • A KYC record is "Validated" when the KRA has verified it against official databases (Income Tax PAN data; Aadhaar XML, DigiLocker or mAadhaar) and the PAN-Aadhaar link is verified. Validated KYC can be used with any intermediary.SEBI circular SEBI/HO/MIRSD/SECFATF/P/CIR/2024/41 (14 May 2024)
  • In practice the KRAs show three working statuses: Validated (use anywhere); Registered (KYC done with a document other than Aadhaar, with email/mobile validated — the investor can continue with existing fund houses but must redo KYC for a new one); and On Hold (email and mobile not validated — no transactions until fixed).KRA circular, 26 May 2024 (effective 1 Jun 2024), and AMC investor pages — descriptions from KRAs and AMCs, not from SEBI's own text
  • KRAs upload verified KYC records to the Central KYC Records Registry (CKYCRR) within 7 days.SEBI circular SEBI/HO/MIRSD/SECFATF/P/CIR/2024/79 (6 Jun 2024)

Nomination (from 1 September 2026)

  • For a folio held singly, nomination is mandatory unless the investor submits an opt-out declaration (on the prescribed form or online). For joint holdings nomination is optional, and all joint holders must consent to add or change a nominee.SEBI circular SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676 (29 May 2026), "Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios", clauses 4 and 4.3
  • An investor can name up to 3 nominees. Only the nominee's name and relationship are required; date of birth is required if the nominee is a minor. Shares not specified are split equally.Same circular, clauses 5.1 and 7
  • The rules apply to existing folios too, but there is no freeze: RTAs send reminders twice a year to folios without nomination. This circular supersedes all earlier SEBI nomination circulars, including the January 2025 one that allowed up to 10 nominees.Same circular, clauses 10.2, 11, 13 (effective 1 Sep 2026) and 15

Payments

  • Payments must come from the investor's own bank account; third-party payments are not accepted except in the limited cases each AMC lists in its Statement of Additional Information (SAI). Redemptions are paid only to the investor's registered and verified bank account.SEBI Master Circular for Mutual Funds (20 Mar 2026), paras 17.4.1-17.4.4; the exceptions vary by AMC — check its current SAI
  • For a minor's investment, payment is accepted only from the bank account of the minor, the parent or legal guardian, or a joint account of the minor with the parent or guardian.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 15.13.1
  • Cash investments are allowed up to ₹50,000 per investor, per mutual fund, per financial year, subject to anti-money-laundering rules; repayment is only through banking channels. E-wallet investments share the same ₹50,000 umbrella limit.SEBI Master Circular for Mutual Funds (20 Mar 2026), paras 17.6.1-17.6.2 and 15.12.1(d)
✓ Do
  • Check the client's KYC status on the KRA site before the first transaction with a new fund house.
  • Explain nomination at every new folio, and keep the opt-out declaration if the client refuses.
  • For a minor, check whose bank account the payment comes from before you submit.
✗ Don't
  • Don't put your office mobile or email in a client's folio "for convenience".
  • Don't correct, add or overwrite anything on a signed form yourself.
  • Don't accept a cheque or transfer from anyone other than the investor (outside the AMC's listed exceptions).
Checklist for this chapter
Chapter 7

What you say in public

A post, a WhatsApp forward or a YouTube short is communication with the public, and the rules for it are now specific — down to what must appear at the start of each video.

Social media (from 1 May 2026)

  • SEBI-regulated entities and their agents — mutual fund distributors are named — must prominently disclose registered names and registration numbers on the home page of their social media handles and at the beginning of each video or post that relates to the securities market. This covers YouTube, Instagram, Facebook, WhatsApp, X, LinkedIn, Threads, Telegram, Reddit and similar platforms, in public or closed groups.SEBI circular HO/(79)2026-MIRSD-PODMMC (26 Feb 2026), paras 3(b) and 4.1(i); effective for content uploaded on or after 1 May 2026
  • An agent of a single principal shows the principal's SEBI-registered name and number, followed by its own registered name and number. An agent of several principals — which describes most MFDs — puts on its home page a web link listing all its principals' SEBI names and numbers followed by its own, and at the start of each piece of content shows the name and number of the principal mutual fund the content relates to, followed by its own name and ARN.Same circular, paras 4.1(iv)-(vi), including SEBI's worked example of a mutual fund distributor
  • Train your representatives in responsible use of social media: content standards, authenticity, approval of information, frequency and ethics.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 5(b)
IN PRACTICE
  • Profile/bio: your name, ARN, "AMFI-registered Mutual Fund Distributor", and a link to a page listing the fund houses you distribute (with their SEBI registration numbers).
  • Post about one scheme: start with that fund house's registered name and SEBI number, then your name and ARN.
  • General education post (no scheme named): SEBI's circular speaks of the principal "to whom the content relates"; where no single fund house is involved, showing your own name, ARN and the link on your profile is the reading most MFDs follow. If in doubt, ask the AMCs you are empanelled with.

Advertisements and material

  • Mutual fund advertisements must be accurate, true, fair, clear, complete and not misleading; must not contain projections, testimonials or any ranking; must not use celebrities or exaggerated slogans; and must not unfairly compare or discredit others. MFDs must follow the SEBI Mutual Fund Regulations and guidelines on advertising and sales literature.SEBI (Mutual Funds) Regulations, 2026, Fifth Schedule (Advertisement Code), clauses (a)-(h); AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct I(a) and 2(a)
  • Every advertisement carries the standard warning, word for word, with nothing added or removed: "Mutual Fund investments are subject to market risks, read all scheme related documents carefully." In a regional-language advertisement the warning is in that language; in audio-visual material it is shown and spoken clearly (SEBI's example: all 14 words for at least 5 seconds).SEBI (Mutual Funds) Regulations, 2026, Fifth Schedule, clauses (i)-(k)
  • Performance, where an AMC advertises it, is shown as CAGR for 1, 3 and 5 years and since inception, with returns on a standard ₹10,000, stating whether it is the Regular or Direct plan; no performance is shown for a scheme less than 6 months old.SEBI Master Circular for Mutual Funds (20 Mar 2026), paras 14.2.1-14.2.2
  • Use the marketing material the AMC provides. Do not design your own material for a scheme, and do not display any AMC's name, logo or mark without its prior written approval.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(k)
  • Make no false or defamatory statement about any AMC, AMFI, scheme or other MFD, in any forum including chat groups and social media; keep every communication factual and unbiased.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 6(b)

Finfluencers

  • A SEBI-regulated person, or its agent, must not associate — through money, client referrals, linked IT systems or anything similar — with a person who gives securities advice or recommendations without SEBI registration, or who makes claims of returns or performance without SEBI permission. MFDs are agents of AMCs and are covered; AMCs are responsible for their agents' compliance.SEBI (Intermediaries) Regulations, 2008, reg. 16A (effective 29 Aug 2024); SEBI circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2025/11 (29 Jan 2025), FAQ Q3, Q11 and Q13
  • A person engaged solely in investor education is outside this prohibition, provided they do not use the last three months' market price data to name securities in a way that hints at future price, advice or a recommendation.Same FAQ circular, para 2 and Q8
✓ Do
  • Add your name, ARN and "AMFI-registered Mutual Fund Distributor" to every profile and every client-facing PDF.
  • Put the standard warning, unchanged, on every post or image about mutual funds.
  • Use the AMC's own approved creatives when you talk about a specific scheme.
✗ Don't
  • Don't post "top 5 funds", "best SIP for 2027" or any ranking.
  • Don't post a client's screenshot or testimonial about returns.
  • Don't pay or partner with an unregistered influencer to bring you clients.
  • Don't shorten or "translate loosely" the standard warning.
COMING: COMMON ADVERTISEMENT CODE (NOT YET IN FORCE)
  • SEBI notified a Common Advertisement Code on 8 October 2026 (SEBI (Intermediaries) (Second Amendment) Regulations, 2026, new Chapter IIID). It comes into force 180 days after its gazette publication of 9 October 2026 — around April 2027 — and will replace the Fifth Schedule. SEBI's board papers say AMFI may prescribe separate standards for distributors. Until then, the rules above apply.
Checklist for this chapter
Chapter 8

Records, data and confidentiality

An MFD holds some of the most sensitive data a family has: PAN, Aadhaar-linked KYC, bank accounts, holdings. The rules on keeping it are short; the duty is large.

The rules

  • Keep adequate records of your clients, physical or digital, including KYC records and your correspondence with investors on the suitability of a scheme or transaction and their consent or dissent.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 3(d)
  • Keep AMC and investor information confidential. Do not share it without consent unless the law requires it, and do not share client data with group companies for cross-marketing. Use data provided by AMCs only for the purpose it was given, and purge it when it is no longer needed.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 2(f)-(g)
  • Maintain adequate digital infrastructure, including cybersecurity measures, and internal controls to detect and prevent mis-selling and financial loss. Insurance cover is encouraged.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 3(b)-(c)
  • Co-operate with AMCs, AMFI, SEBI and their due-diligence agencies, including by providing copies of investor documents you hold when asked.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 5(c)
  • Maintaining investor documentation under anti-money-laundering rules is the AMC's responsibility; where documents said to be kept by a distributor are incomplete, trustees must stop commission to that distributor until they are complete.SEBI Master Circular for Mutual Funds (20 Mar 2026), paras 17.1.1-17.1.2

Data protection law — dates to know

  • The Digital Personal Data Protection Act, 2023 and the DPDP Rules, 2025 (notified 13 Nov 2025) apply to anyone who processes personal data digitally. The main duties — notice and consent, reasonable security safeguards, breach reporting, data-principal rights and erasure — come into force 18 months after notification, around May 2027.DPDP Rules, 2025, G.S.R. 846(E) (13 Nov 2025) and commencement notification G.S.R. 843(E); phased dates as reported — check the e-Gazette for any change
✓ Do
  • Keep KYC copies and client correspondence for at least 5 years after the relationship ends. (Good practice, matching the PMLA period for reporting entities; no AMFI or SEBI rule fixes a period for MFDs.)
  • Lock client files and spreadsheets; use two-factor login on email and WhatsApp Business.
  • Write down who in your office can see client data, and remove access when someone leaves.
✗ Don't
  • Don't forward client PAN, Aadhaar or bank details on personal WhatsApp groups.
  • Don't give your client list to an insurance or loan agent, even inside your own group.
Checklist for this chapter
Chapter 9

When something goes wrong

Complaints, a lapsed registration, a client who wants to leave, a staff member who misbehaves: each has a set procedure, and following it is itself compliance.

Complaints

  • Endeavour to resolve investor grievances arising from your marketing, sale and distribution, and give AMCs complete assistance in resolving them.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 4(j)
  • Investors can complain on SEBI's SCORES platform against SEBI-registered entities; the entity must resolve a complaint within 21 calendar days, after which the investor can seek review and then Online Dispute Resolution. AMFI is the designated body for mutual funds. As MFDs are not SEBI-registered, a complaint about an MFD is in practice taken up through the AMC.SEBI circular SEBI/HO/OIAE/IGRD/CIR/P/2023/156 (20 Sep 2023); routing of MFD complaints is a practical reading, not an express rule
  • SEBI's Online Dispute Resolution (SMART ODR) covers disputes with mutual fund AMCs, including claims arising on account of their mutual fund distributors.SEBI Master Circular for Online Resolution of Disputes, SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/145 (31 Jul 2023, as updated), Schedule A

Breach, suspension and action

  • AMCs must monitor distributors, report breaches of the Code of Conduct to SEBI and AMFI, and suspend business and commission to a non-compliant distributor until it complies. No mutual fund may deal with a distributor who contravenes the Code.SEBI Master Circular for Mutual Funds (20 Mar 2026), paras 16.7-16.8
  • If your ARN is suspended for breach of the Code: you cannot sell, no commission accrues during suspension, and all purchases, switches and SIPs/STPs under your ARN — including those registered earlier — move to the Direct Plan and stay there unless the investor asks to return after the suspension is revoked.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 11, paras 12.1-12.3
  • Breaking the contest and incentive guidelines can lead to dis-empanelment, a bar on onboarding new clients or accepting new business, suspension of ARN or cancellation of registration.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 8, para B.4

When a client, or you, moves on

  • An investor may change distributor, or move to Direct, without a No Objection Certificate from you. The new distributor is paid trail on those assets only after a 12-month cooling-off period, at the lower of the two distributors' rates.SEBI Master Circular for Mutual Funds (20 Mar 2026), para 15.9.1; AMFI Master Circular for MFDs (14 Jan 2026), paras 6.1.1-6.1.7
  • A distributor can transfer its entire book only in set cases — change of name or legal status, merger or similar event, or a sub-distributor moving all its AUM to its principal — with notice to every client and a 15-day window to object.AMFI Master Circular for MFDs (14 Jan 2026), paras 6.2-6.4
  • Refrain from false or defamatory statements about other MFDs, including one who has taken a client from you.AMFI Master Circular for MFDs (14 Jan 2026), Ch. 7 Code of Conduct 6(b)
✓ Do
  • Keep a simple complaint register: date, client, issue, what you did, date closed.
  • If an ARN or certificate is about to lapse, renew first and transact after.
  • When a client leaves, hand over their papers politely and promptly.
✗ Don't
  • Don't ask a client for an NOC, or delay their transfer.
  • Don't keep transacting on an expired or suspended ARN — the business goes to Direct and the commission is lost.
Checklist for this chapter

Appendix A — One-page compliance checklist

Tick every line once a quarter.

  • Name, card, board, website and social profiles: no Adviser/Consultant/Planner/Wealth Manager; name + ARN + "AMFI-registered Mutual Fund Distributor".
  • NISM certificate, ARN and every EUIN valid; renewals diarised 6 months ahead.
  • Empanelled with every AMC I sell; sub-distributors hold valid ARNs.
  • DSC submitted by 30 June (and collected from sub-distributors).
  • Commission disclosed for competing schemes before the client chooses; no rebates, gifts or contests.
  • Suitability recorded for each client; no indicative or assured returns ever.
  • Forms: investor's own contact details; nothing altered after signature; EUIN filled.
  • KYC status checked; nomination or opt-out on every single-holder folio; payments only from permitted accounts; cash within ₹50,000.
  • Social media: names and numbers per SEBI's 26 Feb 2026 circular; standard warning unchanged; no rankings, testimonials, projections or unapproved logos; no finfluencer tie-ups.
  • Client data confidential, access limited, records kept.
  • Complaint register maintained; clients free to move without NOC.

Appendix B — Sources used for this edition

Each was read for this edition on or before 29 October 2026. Paragraph numbers in the chapters refer to these documents.

  • AMFI Master Circular for Mutual Fund Distributors, AMFI/MFD-CIR/32/2025-26, 14 Jan 2026Registration, renewal, fees, names, SIF registration, empanelment, commission eligibility, AUM transfer, Code of Conduct (Ch. 7), contests, Direct Plans, DSC, suspension.amfiindia.com — Distributor Corner — AMFI Circulars
  • AMFI CIR/ARN-33/2026-27, 28 Jul 2026Single NISM V-D registration for mutual funds and SIFs; combined fees.amfiindia.com — Distributor Corner — AMFI Circulars
  • SEBI (Mutual Funds) Regulations, 2026, F.No. SEBI/LAD-NRO/GN/2026/294, gazette 14 Jan 2026, in force 1 Apr 2026 (amended 7 Jul 2026 and 8 Oct 2026)Reg. 27 (nomination), 28 and Fifth Schedule (Advertisement Code), 34 (CAS).sebi.gov.in — Legal — Regulations
  • SEBI Master Circular for Mutual Funds, 20 Mar 2026, in force 1 Apr 2026Ch. 11 (commission, B-30 incentive), 14 (advertisements), 15 (CAS, change of distributor, minors, e-wallets), 16 (certification, due diligence of distributors, Code of Conduct), 17 (third-party payments, cash).sebi.gov.in — Legal — Master Circulars
  • SEBI circular HO/24/13/17(1)2026-IMD-POD-1/I/16895/2026, 21 Jul 2026Certification for SIF distribution: NISM V-D.sebi.gov.in — Legal — Circulars
  • SEBI circular HO/(79)2026-MIRSD-PODMMC, 26 Feb 2026Registered names and numbers on social media, from 1 May 2026.sebi.gov.in — Legal — Circulars
  • SEBI circular SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676, 29 May 2026Modified nomination norms for demat accounts and mutual fund folios, from 1 Sep 2026.sebi.gov.in — Legal — Circulars
  • SEBI circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/115, 8 Aug 2025Transaction charges to distributors discontinued.sebi.gov.in — Legal — Circulars
  • SEBI (Investment Advisers) Regulations, 2013, consolidated as amended up to 25 Nov 2025Reg. 2(1)(m), 3, 4(d), 15A, 22.sebi.gov.in — Legal — Regulations
  • SEBI (Intermediaries) Regulations, 2008, reg. 16A, and SEBI circular SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2025/11, 29 Jan 2025Association with unregistered persons (finfluencers).sebi.gov.in — Legal
  • SEBI KYC circulars of 11 Aug 2023 (2023/0144), 14 May 2024 (2024/41) and 6 Jun 2024 (2024/79)KRA verification, Validated records, CKYC upload.sebi.gov.in — Legal — Circulars
  • SEBI circular SEBI/HO/OIAE/IGRD/CIR/P/2023/156, 20 Sep 2023, and ODR Master Circular of 31 Jul 2023SCORES timelines; online dispute resolution.sebi.gov.in — Legal
  • NISM — FAQs for Mutual Fund Distributors (16 Jan 2026)Certificate validity and CPE.nism.ac.in
  • Digital Personal Data Protection Rules, 2025, G.S.R. 846(E), 13 Nov 2025Phased commencement.egazette.gov.in / meity.gov.in

Appendix C — What is changing next

Known on 29 October 2026. Check each before relying on this book.

  • Common Advertisement Code (SEBI Intermediaries Regulations, new Chapter IIID, notified 8 Oct 2026): in force around April 2027; replaces the mutual fund Advertisement Code; AMFI may set separate standards for distributors.
  • DPDP Act and Rules: main obligations from around May 2027 (a shorter timeline was proposed in January 2026).
  • SEBI working committee on the scope of advice by MFDs and the MFD/Investment Adviser overlap: set up in 2026; no consultation paper or circular found as on 29 October 2026 (press reports only).
  • SEBI KYC proposals (October 2025 and January 2026), including first investment only after KRA verification and periodic KYC review: proposed, not in force.
  • How to stay current: AMFI website — Distributor Corner — AMFI Circulars; SEBI website — Legal — Circulars and Master Circulars; and the "Notice cum Addendum" emails AMCs send to empanelled distributors.
NOT LEGAL ADVICE
  • This book summarises rules as on 29 October 2026, for general information.
  • It is not legal, tax, regulatory or investment advice, and it is not issued, reviewed or endorsed by AMFI, SEBI, NISM or any AMC.
  • Where this book and a circular differ, the circular is right. Rules change: check the sources in Appendix B for later versions.
  • Each MFD is responsible for his or her own compliance.

If you find a rule here that has changed, or a mistake, please write to info@aumsetu.com — the next edition will carry the correction and its date.

— Draft by Deepak Singla, AMFI-registered Mutual Fund Distributor (ARN-76535), Aumsetu.com

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.