Mr.Vijay Venkatram has taken pains to clarify on the issues of EO & EUIN. Let us be frank & hit the Bulls eye. Is it conceivable that a Client would not have been advised on the product he has chosen? How many people in our Country care to read all the documentation though there is a specific rider by SEBI on this?.Risk profiling is the job of a Qualified CFP & most likely not of a pure distributor of products. . All this is resulting in severely squeezing the hapless distributor in that he spends most of his time with regulatory compliances than doing business. It is understable that SEBI is concerned about Investor protection. You have already created a Direct Share Class which obviously is self advised/motivated in making investment decisions. Therefore it is inconceivable to think that a Client has not received guidance/ advise. Wherever there is gross selling involved the client has access to different fora for redressal.

The whole issue is that fund houses have implemented EUIN because SEBI expects the same to be implemented. None of them have taken efforts to list down the related issues. EUIN is supposed to be unique for a person throughout his/her life but CAMS database doesnt have a mechanism to identify uniquenes as they dont capture the PAN number for all unique EUINs. People are silent about how to provide EUIN for systematic transactions of channel partners. Since all fundhouses have given 90 days window to provide the EUIN its going to be one more remediation process, The amount of time and effort each one will put in for reconciliation of expected money is going to be huge. No one has spoken about how to provide EUIN or declaration for transactions getting executed through contact centre or net etc. CAMS is having a huge backlog of EUIN/ARN applications and what is the recourse available for such distributors whose applications are struck at CAMS end.

YES..LOTS OF DISCUSSION ON EUIN..I FEEL THAT--1-EUIN TO BE PUT BY ALL DISTRIBUTOR IRRESPECTIVE OF ANY THING.SO SALES PERSON CAN BE IDENTIFIED LATER ON.--2--THERE SHOULD BE NO LINKAGE BET BROKARAGES PAID BY FUND HOUSE OR SERVICE CHARGE PAID BY THE INVESTOR WITH SUCH EUIN.--3--EO/ADVOSORY MAY BE KEPT AS PER OPTION OF DISTRIBUTOR AS DONE PRESENTLY. SO IN ALL--WHILE WE ALL PUT EUIN NO JUST LIKE OUR ARN,REST ALL -PAYMENT-TO REMAIN AS USUAL.SIMPLE..OK?--THANKS.

Does having EUIN mandatorily means we now need to get registered with SEBI?Pls clarify.

EUIN means Employee Unique Identity Number..But we IFAs are not employees

The clause mostly states about the employee of the ARN HOLDER; as the ARN HOLDER has already given declaration that he doesnt has employees then there is no necessity of this EUIN to the distributors who are not having employees...... SO, this is little bit contradictory.... WE request more CLARITY on this ....... by the regulatory bodies

Any reform in the interest of customer, distributor & industry is always welcomed. But this is little confusing......... Some customers will be taking the advise of the distributors but they might not pay any advisory fee...... mostly seen in the TIER 3 cities, towns, rural areas....e.t.c., If i mention my EUIN it will be understood that i have taken some fee, as mentioned in the circular then it will be wrong because the advise has been given but the fee is not paid.... ; And if CUSTOMER TICKS the BOX then it will be ALSO WRONG because it declares ADVISE NOT TAKEN. And secondly, execution only word is most confusing... how many customers in the industry are well versed with the mutual funds and if they know well they have the option of DIRECT.... they will not come to distributor..... then this word never arises.... IF DIRECT is there, then what for EXECUTION ONLY.......

Why was the need to generate one more No ? As it is sub brokers have ARN, Internal code from broker & now EUIN. Instead they could have alloted ARN no to employees of brokers. The broker and the employee could have decided amongst themselves about the ARN fee. Why do we go in for more and more bureaucracy ? PAn #, Aadhar #, ARN #, EUIN #, Insurance code #, Passport #, Driving Licence #......

Good one. My simple understanding is this all the professional should have accountability. This EUIN is nothing but remind us about the same. I personally feel if any advise given in good faith with due diligence ALL IS WELL.

1. Dont the MFs also sell by way of presentations to Distributors? Why are their sales personnel not covered under EUIN? 2. Dont the MFs give data off the record, to influence a Distributor to direct funds their way? 3. Dont people in the sales function in the MF industry not move between funds or become distributors in due course? Do people only start mis-selling if they are distributors and not if they are employed by MFs? 4. EUINs should apply to every person who meets a customer or a distributor whether he is an MF employee or a distributor or employed by a distributor. If EUIN is only for Distributors, AMFI is implying that MF employees are super human, not subject to pressures of mis-selling due to targets, and the Distributors and their employees are the only culprits in the system!!

AMC, R&T is not ready with the modifications in account statement to include EUIN number. Why is EUIN number left blank in the transaction slip of the account statement even when EUIN is mentioned in the application form? Why was it implement when AMC, R&T is not ready with the new forms and account statement. Who should be held responsible if EUIN is not captured in spite of mentioning in the application form? More than the investment details of investors IFAs need to check whether EUIN number is reflecting in the statement or not.Can Mr.Vijay take forward this genuine concern to AMC / R&T?

DEAR MR. VIJAYSIR, THANKS FOR THE DISCUSSION ON EUIN. IT HAS GIVEN SOME CLARIFICATION. BUT STILL EVEN IF I TAKE DECLARATION N SING OF THE INVESTORS N NOT WRITE MY EUIN, THEN IS CAMS/KARVY WILL PAY MY COMMISSIONIF MF HAS NOT INSTRUCTED THEM ABT THIS? PLEASE TRY TO REMOVE THIS CONFUSION.

Dear Mr. Sathe, (1) If you do not put your EUIN AND your client has not signed off the EO declaration, then your commission is withheld for 90 days, within which you have to rectify the situation - by either putting your EUIN or getting a client declaration about the transaction being EO. If you do neither within the 90 day period, you will lose your commission for that transaction. (2) Putting your EUIN does not imply that you are charging fees from your clients. That is a separate decision between you and your client. All that the regulator wants to ensure is that if the transaction is EO, there should be no fees payable by the client to the distributor, because in a EO transaction, no value was added by the distributor in helping the client make his investment decision. Trust this clarifies.

I am not clear about two points. Firstly, what is the implication on our upfront(whatever little we get) and trail commission if we put or do not put our EUIN ? Secondly by putting EUIN does it mean that IFA charges Advisory Fee ? Because advisory fees charged by an IFA like me also depend on the business generated by that client. I would like Mr. Vijay to through some light on this

Thank you Vijay and Wf for your efforts and thoughts. You have given us lot of understanding about the EUIN and its possibilities. All these actions by Regulators and Authorities look like moving ahead two steps forward and drop back three steps. Surprised, who have brought /given / thought , this idea of " Execution Only" means of escape of responsbility.

Thanks ,Vijay. there is lot of confusion in the mind of IFAs as well as bankers alongwith amc people in Chandigarh

hi, we are following execution only process except some exception. we are dealing with purely retail client which come to our office & we are not going to them. 90% retail client never disclose their total investment portfolio, they just disclose just investment they want to do. so, for us client profiling is not possible & we have said this to due dilligence auditor also. when we have no full profile, how we can advise properly. so, only in case client share their investment detail with us, we will put our EIUN. ulpesh raj.

Where will the AMC RMs stand in this whole process of EUIN? AMC RMs dont have Direct interaction with corporate clients and therefore there is no need (is it so?). If there is mis-selling through direct investment who should be held responsible AMC or RM? How regulator is going to keep track of that.

DEAR SIR Thanks. Very good article on EUIN. My personal opinion is only that our mutual fund sector is not developed and our rural Indians are not getting benefits of growth oriented investment. Our IFA can do this work if we prepare and guide them properly. Our IFA must get enough remuneration, but unfortunately our SEBI is creating lot of problems and introducing something new which is not helping to our mutual fund industry. We must know that mutual fund business is in buyer market segment and investor is not ready to pay fees most of the time. I found in all develop countries like Canada, USA and in Europe 90% people are aware about mutual fund industry and mutual funds A M C paying direct commission to mutual fund distributors and having only one licence number. SEBI must work for consumers awareness program me. We require good learned distributors for mutual fund industry. SEBI must find out that why mutual fund industry are not getting good distributors?

Will it not be better to go for EUIN & advise only those schemes that get classified as Simple and Performing Schemes . . .

Before rading this article i do not bothers about EUIN no, i think its just like ARN no.. So thanks for the gidelines.. Now im in a state of cofusion what to do.. Write the EUIN or EO declearation... What is in the mind of SEBI we dont know...Why this all happen in mutual fund industries. Thats why people are fooled by the chit fund companies. I think here i have to go one step back and THINK.. what to do?

cont.. We have to understand one more very common thing that only advisor is not responsible for the bad performance of the schemes, AMCs are also responsible equally, what action will sebi take against them. there are 2 AMCs which have badly underperformed since 2008 and the fund houses have merged somany schemes in between, what about the status of our advisory in such cases. One thing is very clear with respect to the education level, attitude level and perception level of the citizens of our country, we are still not very clear what we want to achieve by all these guidelines one or the other day. kindly discuss.

I am having a small company involved in financial business. MF is one of the product. I accept that no MF product is been bought by the client in india . Even for ELss schemes the client will sit and discuss with the agent to select the fund house for doing the investment. Here anyhow the advisory happens, but in most of the cases advisory fees is not paid to the agent even if he does advisory. This is due to the pre assumption of the market that the "product manufacturer pays for the sale" be it any product in the market. Here by putting EUIN SEBI should try to penalise against those for whom more number of complaints come from different clients. cont..

You have cleared most of my doubts on EUIN which AMCs were not able clear. Thanks for your Article

We believe it is an ill conceived step. Instead of streamlining the process for all stakeholders including clients, regulators have complicated the web. Colour coded application forms, claw back of commission, Advisor and Distributor model, ARN Renewal process and now EUIN. EUIN process is fine provided SEBI and AMFI junk Advisor and Distributor model. Or else there are ramifications if one goes by the EUIN Declaration. It require immediate amendment. Further, when IFA runs a proprietary firm, why he/she has to take EUIN? A simple declaration that he/she alone does the marketing and sales of mutual funds should suffice for SEBI/AMFI. Being the only one, his/her accountability is fixed. Asking such IFAs to pay Rs.3000-and get EUIN, is money mobilization for AMFI.

In execution only, a written communication by the distributor be made to the investor regarding the unsuitability of the product and it must be accepted by the investor. This may be taken note by all the IFAs. So keeping in line with Mr. Dhruv Mehta that there is negligeble incremental risk by writting down EUIN.

In my opinion there was no need to introduce either EUIN or EO statement. Having ARN as a distributor we owe the responsibility of sale to investor. By introducing fresh norms and conditions, the work of distributor is being complicated and the industry as a whole would suffer. There are no less complications already exisiting with respect to KYC and change form for kyc and so on. If the industry wants growth, there has tobe less complication and less changes. Bringing changes every now and then and c omplicating the things would drive away distributors from the industry, as a result of which Indian Economy as a whole would suffer. The industry can not survive without distributors, this is a fact. Then why to complicate the processes and procedures?

One more confusion added to the existing. They would keep doing so to cover up the other confusion caused. In terms of T-15 B-15 Classification they earlier said that it would be on the city of lodgement rather than the PinCode of the investor. Any person should have guessed that classfications are based on the location of the investor and not the distributor. BUT it took AMC, SEBI and AMFI nearly a month to understand this simple concept. B15 were paid the full amount Upfront and when I disscused the drawback with AMC that could be a chance that the drawback would not be recoverable if the IFA stopped business they said my fears were unfounded and now they have come up with payment in installmens called upfront but paid at their whims and fancy.

Dear Mr.Vijay. Great - Excellent summarisation. Fully agree with the view - asking the client to sign the declaration, projects us in a very bad light to the client - as if we are not confident of self. It definitely affects and changes the clients opinion about us. If i am confident about my processes/proposals and have a satisfactory relationship with my client, i need not have to worry about any regulation.

SIR, REGARDING SEBI GUIDELINES.. OF INTERACTING WITH CLIENT .. IS THIN LINE OF ADVISORY & SALES.. MAY BE IN FUTURE WE HAVE TO BE PREPARE TO ACT ACT AS ADVISER...

There are more reevant issues to be solved by AMFI & dont know why they are wasting the time on such irrelevant issues of EUIN. As all of them knows that misselling is done mostly by Banks & corporates then why they are bringing such irrelevant issues for Individual Brokers. Good job done here by WF.

THANK YOU VERY MUCH FOR CLERIFICATION ON EUIN WITH DETAILES.

Dear Vijay, Thank you very much for taking this issue and giving some clarity on the whole confused issue, where lot of IFAs were worried a lot on the whole word EUIN. With regard to an IFA I think there is no change in life because in anyways you were responsible for what you sold yesterday and continue to be today also except that you have put in your EUIN number.

Many-2 thanks for latest updation in mf industry.

WF has clearly and objectively clariefied relevant issues of EUIN. EUIN is not of any relevance to an IFA without any subbroker or sales persons. Hence Individual IFA without subbrokers or Sales persons, should be exempted from this additional formalities.

Good effort by WF for the excellent clarifications on the EUIN deliberations. Thank you Wealth Forum.

Good, detailed and useful explanation.TNX

Very well summarised, thanks Mr.Vijay. When a rule is made with the clear cut intention, no back door entry provision like EO Statement should be made available. The primary idea of EUIN is to identify the Sales person if at all any mis-selling happens. If you give this back door provision, the whole purpose will be defeated. We already knew which segment of Distribution channel always do unethical acts. This EUIN introduction will affect them more than IFA channel. Let us be True to ourselves. Without the intervention/ briefing of Sales person, Investor hardly takes Investment decision. Mere briefing does not amounts to Advisory Transaction as SEBI has exempted MF Distributor from this ambit, unless he Registers him self as an Advisor. We should be responsible for our acts.

There seems a lot of trust deficit developed in our fast evolving industry midst an IFA and his or her authority and say even the AMC, this has generated a lot of speculation of what each stake holder can or will do with each and every change the industry faces be it a regulation change or market change or business model change. It is only normal for all this to happen as thoughts evolve and changes occur in our rapidly changing and growing industry. All IFAs should feel free to use the EUIN and must use it without any inhibition. Let us continue to take care of our clients interest as closely,intently and objectively as we have always been doing since day 1 and let routine evolving protocols take care of themselves. WF handling of this topic here today is explicit, direct, focuused and puts the normal concerns IFAs may have in the right perspective.

Thanks Vijay for taking up this very very important matter. I dont fully accept your view that affixing EUIN does not make an ARN holder as an advisor...then why these lines in the declaration conveying... putting EUIN means that it is an advisory transaction…and presumably fees has been collected, IFA Associations, kindly take this matter and get some clarity...

No harm in writing EUIN in most of the forms, where obvious interaction does take place.

This is an ill conceived, fadist type concept imposed on the IFAs. Anyone can still sell mf by putting somebody elses arn and euin and customer would not know. This should be scrapped.

good from wf thanks for vijay to updtae our comunity

very well elucidated.....thanks.