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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Fund Distribution and Channel Management Practices

Under SEBI's mutual fund regulations, which of the following statements about the payment of commission to distributors is correct?

Commission can be paid by an AMC only to distributors who hold a valid AMFI ARN and whose transactions are mapped to that ARN. Rates are set by AMCs within SEBI limits, not fixed uniformly by AMFI, and nothing is paid to SEBI.

  1. ACommission may be paid to any person even without an ARN
  2. BCommission can be paid only to AMFI-registered distributors holding a valid ARN, with the investor's transactions routed under that ARNCorrect
  3. CCommission is fixed by AMFI at the same rate for all schemes
  4. DCommission is paid by the investor directly to the SEBI

Explanation

Distributors must hold a valid ARN, and the code requires transactions to carry the ARN so the AMC can pay the commission. Rates are decided within SEBI's limits by AMCs, not set uniformly by AMFI, and investors do not pay commission to SEBI.

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