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

Which of the following is a duty of a mutual fund distributor under the AMFI Code of Conduct?

A distributor must consider the investor's risk profile and needs and recommend only suitable schemes, acting in the investor's interest. Recommending based on highest commission, withholding scheme documents or sharing confidential client data with others breaches the AMFI Code of Conduct.

  1. ARecommending the scheme that pays the highest commission regardless of suitability
  2. BEnsuring that the investor's risk profile and needs are considered and the scheme is suitable before recommending itCorrect
  3. CWithholding scheme documents to avoid confusing the investor
  4. DSharing the investor's confidential data with other product sellers for marketing

Explanation

The code requires distributors to act in the investor's interest, assess suitability, provide scheme documents and maintain confidentiality. Recommending on commission alone, withholding documents or sharing data violates these duties.

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