Change of ARN and transfer of AUM: rules for MFDs

When the investor changes distributor

• No NOC is needed from the old MFD. The investor can also move to Direct.
• The investor uses the prescribed form (Annexure 10), with a verified wet signature.
• The RTA sends the investor an SMS on T+1 and emails the new MFD. The change takes effect on T+11 if there is no objection.
• The new MFD gets trail only after a 12-month cooling off period (since 11 August 2025; it was 6 months from March 2024 and nil before that). Switching back restarts the 12 months.
• Trail is paid at the lower of the old and new MFD's rates. No other incentives.

When a distributor initiates the transfer

Allowed only in three cases:

1. A change in name or legal status, such as individual to firm, LLP or company.
2. A merger, acquisition, consolidation, demerger, dissolution or new code.
3. A sub-distributor moving its entire AUM out from the principal.

• The requester needs a valid ARN, KYD compliance and a filed DSC.
• Only a full transfer is allowed. The transferor surrenders its ARN within 15 days, unless it becomes a sub-distributor of the transferee.
• Every client gets a letter or email with a 15-day cooling off for objections. Folios that object are excluded.
• Cases 1 and 2 keep the same commission rate. Case 3 gets the lower of the two rates. Clawback carries over.
• RTAs complete the transfer within 15 calendar days, and CAMS cancels the transferor's ARN within 2 working days.

Voluntary exit

Write to your clients; they choose a new MFD. Surrender your ARN after their folios are updated. Trail to the new MFD is paid at the lower of the two rates.

Death of a distributor: nomination and succession

• AMCs must offer nomination to individual MFDs at empanelment. The nominee receives trail on producing the death certificate, without a succession certificate, and holds it as trustee for the legal heirs.
• With no nominee, a legal heir receives it with proof of heirship.
• The deceased's ARN must have been valid and not suspended on the date of death. The nominee does not need an ARN to receive trail.
• Trail continues until the investor changes ARN, redeems, or AUM reaches nil. No new business or new SIPs under the deceased's ARN.
• To take over the clients, the nominee or heir needs their own NISM, ARN and empanelment, and must apply within 12 months of the death (raised from 6 months in October 2025), with the same 15-day client notice.