What is the Association of Mutual Funds in India (AMFI)?

The Association of Mutual Funds in India (AMFI) serves as an industry standards organisation that assists mutual fund investors by establishing and enforcing regulations. In essence, AMFI establishes the guidelines and regulations governing the mutual fund industry, acting as the overseer for any instances of misconduct, fraud, forgery, or general grievances experienced by investors. In such cases, investors have the option to report these issues to the referee, also known as AMFI, for resolution.
With the responsibility of safeguarding the overall stock market, SEBI took the initiative to establish AMFI in 1955. Its purpose was to effectively regulate and monitor the mutual funds market, ensuring compliance with regulations and maintaining transparency.
Their mission revolves around safeguarding and prioritising the interests of investors while establishing a strong foundation for the seamless functioning of the mutual fund system. As a result, all entities involved in mutual funds, including fund houses and intermediaries, must be registered with AMFI. Presently, there are approximately 45 Asset Management Companies (AMCs) registered with AMFI, as per the latest data available.
AMFI operates through four principal departments, which include:
1. Committee on Operations and Compliance: This committee focuses on overseeing and ensuring the proper functioning and compliance of mutual fund operations. It aims to maintain high operational standards within the industry.
2. Committee on Valuation: The committee on valuation is responsible for establishing guidelines and standards for the valuation of mutual fund assets. It ensures transparency and accuracy in determining the value of investments held by mutual funds.
3. Committee on Financial Literacy: This committee aims to enhance financial literacy among investors. It develops initiatives and programs to educate investors about mutual funds, their risks,
4. Committee on Registration of Certified Distributors: This committee is dedicated to the registration and certification of mutual fund distributors. It ensures that distributors comply with necessary qualifications and regulations, promoting professionalism and ethical practices within the industry.
By operating through these four key departments, AMFI plays a crucial role in maintaining the integrity of the mutual fund industry, protecting investors, and promoting transparency and ethical conduct among all stakeholders.

Objectives of AMFI

AMFI has been established with multiple objectives in mind. Here are a few of them:
1. Setting Professional and Ethical Standards: AMFI aims to establish and define the professional and ethical standards to be followed within the Mutual Fund sector, promoting integrity and responsible practices.
2. Interaction with SEBI: AMFI serves as a liaison between the Mutual Fund industry and the Securities and Exchange Board of India (SEBI), reporting and communicating with SEBI on all matters pertaining to the Mutual Fund industry.
3. Representation of Regulatory Bodies: AMFI represents all regulatory bodies involved in the Mutual Fund industry, acting as a unified voice on matters related to regulations, policies, and industry developments.
4. Oversight of Distributor Behavior: AMFI plays a role in monitoring and regulating distributor behaviour, including the imposition of sanctions, such as the cancellation of ARN (AMFI Registration Number), for any violations of the Code of Conduct.
5. Enhancing Financial Literacy: AMFI strives to increase financial literacy among investors, providing educational initiatives and resources to promote better understanding of mutual funds. The objective is to encourage wider participation and increase the penetration of mutual fund investments in India.
Through these objectives, AMFI works towards maintaining professional standards, fostering effective communication with regulatory bodies, monitoring distributor conduct, promoting financial literacy, and ultimately contributing to the growth and development of the Mutual Fund industry in India.

Role of AMFI

AMFI is dedicated to advancing and upholding standards within the mutual fund industry in India, while promoting ethical practices. It actively works towards safeguarding the interests of both asset management firms and Indian investors. Furthermore, AMFI endeavours to enhance the accessibility and transparency of investments, thereby attracting a larger investor base.
AMFI diligently monitors transactions to prevent any exploitation of investors during the redemption of their profits. It also plays a crucial role in increasing investor awareness, enabling them to make more informed investment choices. Moreover, AMFI assumes responsibility for managing ARN registrations for individual entities, ensuring integrity, transparency, and investor protection throughout the entire process of selling mutual funds.

Code of Conduct for Mutual Fund Providers

In simpler terms, the code of conduct serves as a set of rules that mutual fund providers and related parties
1. Upholding Integrity and Diligence: Mutual fund providers must maintain a high standard of integrity and diligence in all their operations, ensuring ethical behaviour and responsible practices.
2. Transparent Investor Disclosure: It is crucial for mutual fund providers to disclose important information to investors in a clear and understandable manner. This includes providing comprehensive details about their investments and keeping investors informed about any significant matters related to their investments.
3. Professionalism and Alignment with Fund Objectives: Mutual fund providers are expected to uphold professionalism and work in alignment with the objectives of the fund. They should act in the best interests of investors and ensure that their actions are consistent with the stated goals of the fund.
4. Avoiding Conflicts of Interest: Mutual fund providers should actively avoid situations that may give rise to conflicts of interest. They should prioritise the interests of investors and refrain from engaging in activities that could compromise the integrity of the fund.
5. Timely Performance Reporting: Mutual fund providers must ensure the timely and appropriate disclosure of performance reports to investors. This includes providing accurate and up-to-date information about the fund's performance, allowing investors to make well-informed decisions.
By following these important rules outlined in the code of conduct, mutual fund providers can demonstrate their commitment to maintaining ethical standards, protecting investor interests, and building a strong foundation of trust within the mutual fund industry.

AMFI Registration Number (ARN)

The AMFI Registration Number (ARN) is a unique identifier issued by the Association of Mutual Funds in India (AMFI). It is a registration number provided to individuals or entities who are involved in the distribution of mutual funds.
The ARN serves as a recognition and authorization for these distributors to carry out mutual fund-related activities. It signifies that the distributor has fulfilled the necessary requirements, qualifications, and compliances as mandated by AMFI and regulatory authorities.
Obtaining an ARN is essential for individuals or entities engaged in the distribution of mutual funds to ensure compliance with industry regulations and maintain professional standards. It helps in promoting transparency, integrity, and accountability within the mutual fund distribution process.
The ARN is a crucial element in the mutual fund industry, as it not only identifies authorised distributors but also enables investors to verify the authenticity and credibility of the distributor they are dealing with. Investors can use the ARN to cross-check the registration status of distributors with AMFI and ensure that they are dealing with registered and certified professionals.


In recent times, the field of investing has gained significant popularity among a wide range of individuals. This shift can be attributed to the efforts of regulatory agencies like AMFI and SEBI, who have played a vital role in protecting the interests of retail investors. These institutions have prioritised transparency, accountability, and trust, thereby fostering a positive and harmonious relationship among different stakeholders. Their initiatives have created a favourable environment that instills confidence and promotes the healthy growth of the investment landscape.
The significance of these institutions cannot be overstated when it comes to harnessing the potential of the financial economy and driving economic growth. It is crucial for fund houses to strictly abide by the regulations laid out by AMFI for the betterment of the entire mutual fund industry. We must avoid any future incidents similar to the Franklin Templeton crisis.
As a mutual fund investor, it is essential for you to have a clear understanding of the code of conduct that your investment's Asset Management Company (AMC) is obligated to follow. If any grievances arise, it is important to know how to address them with AMFI for appropriate resolution.

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