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Getting funds to investors Β· 6 min

Where a distributor fits

The role, the ARN, the EUIN and KYD

You are the distributor this exam is preparing, so it is worth placing the role precisely. A distributor is the helpful guide between the investor and the fund: they explain the options, match a scheme to a need, and complete the paperwork, but they do not manage the money. To do this legally you need an ARN, the AMFI Registration Number, which you earn by clearing this exam and completing KYD (Know Your Distributor), a one-time verification of your identity, address and bank details with biometrics, the distributor’s equivalent of an investor’s KYC.

Two more identifiers keep the system accountable. When a non-individual distributor (say a bank or a broking firm) makes a sale, its ARN appears on the form, and so does the EUIN, the Employee Unique Identification Number, of the specific employee who actually advised the investor. That small code matters more than it looks: it ties the advice to a named person, so if a sale was mis-sold, responsibility can be traced even after that employee has moved on. To sell a given fund house’s schemes, a distributor must also empanel with that AMC, and AMCs run due diligence on certain distributors, usually larger or non-individual ones, both before and during the relationship. Through all of it, the role lives inside the code of conduct: guidance and service, never a pushy sale.

  1. 1

    A distributor helps an investor choose and complete the paperwork, they guide and serve, they do not manage the money.

  2. 2

    To distribute mutual funds you need an ARN (AMFI Registration Number), obtained after clearing this exam and completing the KYD process.

  3. 3

    KYD (Know Your Distributor) is a one-time verification of a distributor's identity, address and bank details, with biometrics, much like KYC is for investors.

  4. 4

    The EUIN (Employee Unique Identification Number) identifies the specific employee or salesperson who actually advised the sale, so accountability survives staff changes and helps address mis-selling.

  5. 5

    A distributor empanels (ties up) with each AMC whose schemes they want to sell.

  6. 6

    AMCs carry out due diligence on certain distributors, typically larger or non-individual ones, before and during the relationship.

  7. 7

    The whole role sits inside the code of conduct, guidance and service, never a pushy sale.

Rupee example

An investor buys through a bank's relationship manager. The bank's ARN appears on the form, and the manager's own EUIN too, so if the advice was wrong, it can be traced to that individual, not lost in the bank's name.

Practice

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Real exam format. Answer by voice, tap, or press 1 to 4. No negative marking, so always attempt.

To sell mutual funds, a distributor must hold:

An ARN, earned after clearing the NISM exam and completing KYD, is the licence to distribute. Net worth rules apply to the AMC; adviser registration is a different role.
A demat account, adviser licence and net-worth figure are not the distribution requirement.

The EUIN is used to identify:

The EUIN ties the advice to the individual who gave it, so accountability for mis-selling survives even if that person later leaves the firm.
It is not a bank, a benchmark, or the custodian.

KYD (Know Your Distributor) is:

KYD verifies the distributor, much as KYC verifies the investor, and is required to obtain and retain the ARN.
It is not a tax, a fund, or the investor's own KYC.

To sell a particular AMC's schemes, a distributor must first:

Empanelment is the tie-up that lets a distributor sell a given AMC's schemes; the others are not requirements.
Owning the AMC, joining the regulator or pre-buying the fund are not needed.
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