What is ARN ? How to apply online ?

ARN Code – Meaning, Purpose, Registration, Renewal, How to Apply Online

What is ARN Code ?

ARN or AMFI Registration Number refers to a unique number issued to every mutual fund distributor/agent involved in the sale of mutual funds. The intermediaries are required to register with AMFI for selling & marketing of mutual funds. Intermediaries will not be allowed to deal with mutual funds if they fail to register with AMFI and obtain ARN. Application for ARN can be made after getting registered with AMFI and passing the NISM Series-VA Mutual fund distributor examination.

Upon successful verification, intermediaries will receive a photo identity card containing an ARN code, intermediary address, and ARN validity period. The corporate applicants will be issued a registration letter with ARN code, company name, and ARN code validity. Corporate workers, salespersons, or employees will be issued a EUIN card with identical information in accordance with the EUIN.

After understanding what ARN code is, let us delve further into the topic and discuss the purpose of AMFI Registration Number. 

Purpose of ARN Number

To protect the interest of investors, SEBI & AMFI have set guidelines that require the compliance of the intermediaries involved in the activities of selling & marketing of mutual funds. One such important guideline for the intermediaries is to obtain an ARN number after registration with AMFI. This unique number helps AMFI track the transactions conducted by distributors and also to maintain a check on their functioning.

The association with AMFI along with an issued ARN number of the MF advisor points out the authenticity of the distributor.

Also, the ARN number is used to monitor the total assets managed by the distributors and to measure their brokerage.

There is an eligibility criteria that a person must fulfil before applying for an ARN code. The next section discusses all these conditions.

Who can apply for ARN code?

ARN is a unique number issued to –

• Individual agents, brokers, advisors and other intermediaries involved in the selling of mutual funds, who have passed the “NISM-VA Mutual Fund Distributor Certification Exam” and Senior citizens who have attended Continuing Professional Education (CPE) can apply for an ARN. They should be willing to comply with the code of Conduct and other undertakings as stated in the application.
• Corporations engaged in the selling of mutual funds, who have applied to AMFI and are willing to comply with the code of conduct and other undertakings as noted in the application form.

Now you must be wondering why an ARN code is required in the first place? The next section elaborates on the same.

Why ARN (Amfi Registration Number) Code is Required ?

Investing in mutual funds carries an intrinsic risk. Thus, it is critical to pick mutual funds based on your risk appetite and financial goals. Most investors need help in choosing the best mutual fund schemes for them. That’s where mutual fund advisors or distributors come in! However, not just anybody can advise on what mutual funds to pick.  

To safeguard investors and their investments, SEBI and AMFI take several measures, and amongst these is the AMFI Registration Number. All intermediaries marketing or selling mutual funds must clear an exam and get an NISM certification. Moreover, they should also register with the AMFI and get the ARN code. Therefore, this ARN code testifies to the legitimacy of a mutual fund distributor. Only mutual funds distributors or advisors with an ARN code or AMFI Registration Number can sell mutual funds.  

The ARN code also helps track transactions carried out by distributors acting on behalf of investors. This further ensures the protection of investors against any frauds and scams.

ARN Code is the unique identity assigned to the qualified mutual funds distributor. Having an ARN number will mean that the individual is an AMFI Registered Mutual Fund Distributor. It is required for the distributors to track the total assets managed by them and accordingly the commission they are entitled to.  

Also, To protect the interest of investors it is necessary that the individual selling or offering mutual funds to them comply with the guidelines & norms of AMFI and regulatory body SEBI.

Document Required to Get ARN Code

Here is the list of documents required to get an ARN number from AMFI:

• Copy of NISM Certification
• 2 passport size photographs
• Copy of KYD
• Pan Card
• Cancelled Cheque

Advantage of Having an ARN Code

ARN Code is a very beneficial identity not only for mutual fund distributors but also for the investors. Let’s have a look at the advantages of ARN code for distributors and investors:

Benefit of ARN Code for Mutual Fund Distributors

• It provides every mutual fund distributor, advisor or an agent with an unique identification code.
• The distributor becomes legally eligible to distribute or sell mutual funds to their clients
• It helps distributors and advisors to track the assets of investors under them
• It helps to calculate the brokerage or commission that an advisor is entitled to basis total assets or AUM managed by him

Benefit of ARN Code for Investors

• It protects the interest of the investors as a qualified mutual fund distributor registered with AMFI will be advising them on mutual fund investments.
• It assures investors that a NISM certified distributor who have knowledge of mutual funds is associated with them.
• The investors if not satisfied with their mutual fund distributor, they can switch to any other mutual fund distributor very easily. Their assets & investments will be switched to other ARN holders. And they no longer need to be associated with their previous distributor.
• AMFI registered mutual fund distributors also have to adhere to a set of ethical codes established by the Association of Mutual Funds in India. This further safeguards investors and their financial assets.

Every AMFI Registration Number is an alphanumeric code with six components as mentioned below.  

1. Alphabetical code

2. State code

3. Month  

4. Year

5. Six-digit code generated by the system  

6. Checksum digit 

How to apply for ARN Code?

Offline

M/s Computer Age Management Services Pvt has been authorized by AMFI. Ltd. (CAMS) to act as a processing agent in support of ARN. For registration, the agents need to apply in the prescribed format. The form can be obtained from AMFI’s office or any office of CAMS. One can also download the application form from AMFI’s website.

Requirements

• Submit the application form along with the KYD acknowledgment to the CAMS office. In case the KYD process is not completed, the applicant needs to submit the ARN form along with the KYD application form.
• A copy of the NISM certification and two passport size color photographs must be submitted by the applicant.
• The fee for individuals and senior citizens shall be Rs.3,540 including GST. The fees and document requirements  for the companies and other entities will be different.

Online

One can also register online, by visiting the Online Registration page. The application form must be submitted along with KYD (Know Your Distributor) by letter or in person with the KYD application form (if KYD not completed). 

Then, documents will be examined and, if they are seen in order and if the designated fee has been obtained, a Letter of Registration or a photo ID card will be issued & mailed directly to the candidate.

Renewal of ARN Code

ARN holders / EUIN holders are anticipated to apply for the renewal of ARN / EUIN cards, 6 months prior to the expiration of the validity period.

If the request for renewal is made before the expiry date of the ARN / EUIN then there would be continuance in the validity period of ARN / EUIN. If the renewal application is submitted after the expiry of the ARN / EUIN period, the validity of the renewed ARN / EUIN would start from the date of submission of the renewal application. It would be valid until the date of validity as specified on the NISM Passing Certificate / CPE Certificate.

In an instance of Corporate ARN holders, the registration letter will be renewed for a period of 3 years from the date of submission of the renewal application.

How to change arn code for a Mutual Fund ?

An investor may not be satisfied with the services and advice being provided by their existing mutual fund distributor and may want to switch to a new advisor. To do so, the investment has to be delinked from the current AMC or distributor and a request with AMC must be raised.  

This will result in change of the ARN code for a mutual fund. Once the alteration is made, units mapped in the name and ARN of the existing distributor will get transferred to a new agent and will be flagged under a new ARN.  

This request can be made using a physical form prescribed by the AMC or a letter requesting for the change. The forms are usually available on the AMC website or can be procured from the nearest office.  

In this form, name of the investors, folio number, name and ARN (AFMI Registration Number) of the existing distributor or agent along with the name and ARN of the new agent must be mentioned. This must be duly signed by all the investment holders.  

Upon the receipt of request, it may take upto 7 to 10 days to reflect the changes. The SEBI ha mandate that an investor does not need to provide an NOC (No objection certificate) from the previous AMC or distributor. 

Why ARN Code is Important?

ARN Code is important because it helps to identify an individual as an AMFI registered mutual fund distributor. The unique ID is beneficial for both distributors & investors.  

Mutual Fund Distributors can easily track their assets, and investors mapped to them and accordingly the commissions they should receive on their AUM.  

The investors can be assured that their money is parked through AMFI registered MF distributors.  

ARN Code Expiration Validity

The validity of ARN Number is from the date of AMFI Registration to the validity of NISM Series VA Certification which was obtained by the mutual fund distributor. After that, ARN will need to be renewed. The validity of NISM certification is 3 years.