NISM Series V-A, Chapter 3. Updated Jun 2026, 8-minute read.
Mutual Fund Distribution, ARN, and AMFI Registration
Chapter 3 covers how mutual funds are distributed in India — who can distribute them, how to get registered, the difference between regular and direct plans, and how distributors are compensated.
Key takeaways
- ARN (AMFI Registration Number) is mandatory to distribute mutual funds and earn commissions
- To get ARN: Pass NISM Series V-A → Register with AMFI → Pay registration fee
- Regular Plan: commission/trail paid to distributor; Direct Plan: no commission, lower expense ratio
- Trail commission: recurring % of AUM (typically 0.5–1.0% p.a.) paid monthly to distributor
- Distributor vs RIA: distributors earn commission (product push); RIAs charge fee from client (advice-based)
- KYD (Know Your Distributor) mandatory for ARN renewal
ARN (AMFI Registration Number)
An ARN is the unique identity code issued by AMFI to authorise an individual or firm to distribute mutual funds in India. Without ARN, no mutual fund company will credit commissions.
How to get an ARN
- Pass NISM Series V-A (or Series V-C CPE for renewal)
- Complete EUIN (Employee Unique Identification Number) if employed by an ARN holder
- Register at amfiindia.com, upload documents, pay registration fee
- AMFI verifies and issues ARN within a few working days
Direct vs Regular Plans
| Feature | Direct Plan | Regular Plan |
|---|---|---|
| Commission | None | Paid to distributor (trail) |
| Expense Ratio | Lower (by commission amount) | Higher |
| NAV | Higher (same portfolio) | Lower |
| How to invest | AMC website, MFCentral, BSE Direct | Through ARN holder/distributor |
| Suitable for | Informed/DIY investors | Investors needing guidance |
Commission Structure
SEBI's commission regulations (post 2018 circular) require full trail commission — no upfront commissions for mutual fund distributors.
- Trail commission: 0.1% to 1.5% p.a. of AUM maintained, paid monthly based on NAV × units held
- Commission is scheme-specific and fund-house-specific
- Distributors must disclose commission to clients on request
EUIN (Employee Unique Identification Number)
All employees/relationship managers of ARN holders must have an EUIN. The EUIN must be recorded on every transaction form. If an investor transacts without IA advice (execution-only), the EUIN box can be left blank with a declaration.
Frequently asked questions
What is the difference between a distributor and an RIA?
A Mutual Fund Distributor (ARN holder) earns trail commission from AMCs — their income comes from products they sell. A SEBI-Registered Investment Adviser (RIA) charges a fee directly from the client and must not receive commissions. RIAs can only recommend direct plans; distributors can only sell regular plans.
Can a distributor also be an RIA?
No. SEBI explicitly prohibits the same entity from being both a mutual fund distributor and a registered investment adviser. This separation prevents conflicts of interest.
Written by Arpan Das.
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