Mutual Fund regulators have made it mandatory for employees of banks and other financial services firms selling mutual fund products to get an
'Employee Unique Identification Number' (EUIN).
The decision was taken by the Association of Mutual Funds in India (AMFI) in consultation with the Securities and Exchange Board of India (Sebi).
According to the notifications issued by the fund houses, the EUIN would be mandatory for all
kinds of mutual fund transactions with effect from August 1.
The EUIN is largely applicable to sales persons of non-individual mutual fund distributors. Quoting of EUIN would be mandatory in case of advisory transactions.
While EUIN regime has been brought into effect this month for mutual fund transactions through traditional physical modes this month, the transactions made through mobile, stock exchanges, ATMs and call centre platforms would mandatorily need EUINs from August 1 onwards.
According to directions from Sebi, which
regulates mutual funds in the country, the fund houses have been asked to create a unique identity number of the employee, relationship manager, sales person of the distributors interacting with the investor for the sale of mutual fund products. This is in addition to the AMFI Registration Number (ARN) of the distributor.
EUIN aims to assist in tackling the problem of mis-selling even if the employees, relationship managers, sales persons leave the employment of the distributor and would also apply to employees of banks who sell mutual fund products.
The issue of mis-selling of mutual funds by bank staff has come under regulatory scanner in the recent past, amid suspicion that certain employees might be selling wrong products to the investors to get higher commissions.
It would be applicable for transactions such as purchases, switches, registrations of various mutual fund plans, but would be apply for payments of instalments under any plans, as also for dividend reinvestments, bonus units and redemption.
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