Last updated: 30 October 2026 · By Mahak Jain
Quick answer: SEBI makes the rules for mutual fund distributors (MFDs), and AMFI registers MFDs and enforces those rules through its Code of Conduct. The main SEBI rules are: (1) pass NISM Series V-A and hold a valid ARN and EUIN from AMFI; (2) get empanelled with each AMC; (3) earn only trail commission, with no upfront commission, and since 8 August 2025 no transaction charges; (4) no rebates, gifts or assured returns; (5) check each client's risk profile and recommend only suitable schemes; (6) disclose your commission; (7) sell only regular plans; (8) give only "incidental advice", never call yourself an adviser; (9) since 1 May 2026, show your name and ARN on social media; and (10) file the annual self-certification by 30 June. Break them and your ARN can be suspended and your commission stopped.
हिंदी में: म्यूचुअल फंड डिस्ट्रीब्यूटर के लिए नियम SEBI बनाता है और AMFI उन्हें लागू करता है। NISM V-A, ARN और AMC एम्पैनलमेंट जरूरी है। केवल ट्रेल कमीशन मिलता है, रिटर्न की गारंटी या गिफ्ट देना मना है, और केवल रेगुलर प्लान बेचे जा सकते हैं।
| Rule | What it says |
|---|---|
| Registration | NISM Series V-A + ARN (and EUIN) from AMFI, renewed every 3 years |
| Empanelment | Must be empanelled with an AMC before selling its schemes |
| Commission | Trail only, in money only. No upfront commission |
| Transaction charges | Abolished by SEBI on 8 August 2025 |
| New-investor incentive | 1% (max ₹2,000) for new B-30 and new women investors, from 1 March 2026 |
| Plans you can sell | Regular plans only, not direct plans |
| Advice | Only incidental advice. Financial planning needs SEBI RIA registration |
| Social media | Name and ARN on profile and at the start of each post, from 1 May 2026 |
| Annual DSC | Due 30 June; commission withheld after that, forfeited after 30 September |
| Main rulebooks | SEBI (Mutual Funds) Regulations, 2026; SEBI Master Circular for Mutual Funds; AMFI Master Circular for MFDs |
Who regulates mutual fund distributors in India?
| Body | Its role for MFDs |
|---|---|
| SEBI | Makes the rules: who can sell, how distributors are paid, what they must disclose |
| AMFI | Registers MFDs (ARN, EUIN), runs the Code of Conduct, issues MFD circulars, can suspend or cancel an ARN |
| NISM | Runs the certification exam (Series V-A) every MFD must pass |
| AMCs | Empanel MFDs, pay commission, check MFDs' compliance and do due diligence on larger ones |
An MFD is an agent of the AMC, not a SEBI-registered intermediary in its own right. So SEBI's rules reach you mostly through AMFI and the AMCs. New to AMFI? Read what is AMFI.
Which SEBI regulations apply to mutual fund distributors in 2026?
- ✓ SEBI (Mutual Funds) Regulations, 2026: in force from 1 April 2026, replacing the 1996 regulations. They cover commission as a scheme expense and the monthly statement (CAS) that shows investors the commission paid to their distributor.
- ✓ SEBI Master Circular for Mutual Funds: the detailed operating rules, including those on distributors.
- ✓ SEBI (Investment Advisers) Regulations, 2013: stop MFDs from using names like "Adviser" or "IFA" and from giving paid advice without registration.
- ✓ AMFI Master Circular for MFDs (14 January 2026): puts all of AMFI's MFD rules, including the Code of Conduct, in one document.
SEBI rules on registration: NISM, ARN and EUIN
- Pass NISM Series V-A (Mutual Fund Distributors). Valid for 3 years. To sell SIFs as well, see the NISM V-D guide.
- Get your ARN from AMFI. Individuals get an EUIN with it. Staff selling under a firm's ARN need their own EUIN. See how to get AMFI certificate and EUIN registration.
- Get empanelled with each AMC. Business under the ARN of a distributor who isn't empanelled goes to the Direct Plan, with no commission.
- Renew on time. If your ARN expires, you can't sell, new business goes to the Direct Plan, and trail on older business is held until you renew. See ARN renewal.
SEBI rules on mutual fund distributor commission
- ✓ Full trail only: AMCs pay trail commission. No upfront commission, and no upfronting of trail, in cash or kind.
- ✓ Money only: incentives in any form other than trail commission, such as trips or gifts, are not allowed.
- ✓ No transaction charges: SEBI's circular of 8 August 2025 removed the transaction charges AMCs used to pay distributors on subscriptions of ₹10,000 or more, with immediate effect.
- ✓ No commission on your own investments: AMCs strip your own investments out of your commission.
- ✓ Commission shown to investors: the CAS shows each investor the commission paid to their distributor.
- ✓ No rebates: you can't pass any part of your commission back to the investor.
New incentive for new investors (from 1 March 2026): SEBI's circular of 27 November 2025 lets AMCs pay extra commission for bringing in investors who are new to mutual funds (new PAN at industry level):
| Who qualifies | Lump sum | SIP |
|---|---|---|
| New individual investors from B-30 cities, or new women investors from any city | 1% of the first application, max ₹2,000, if the investor stays invested for at least 1 year | 1% of the first year's SIP amount, max ₹2,000 |
It is paid on top of trail, only once per investor, with claw-back. It does not apply to ETFs, domestic fund of funds with over 80% in domestic funds, or overnight, liquid, ultra short and low duration funds. SEBI first set it for 1 February 2026 and then moved it to 1 March 2026. More on pay: how MFD commission works.
SEBI and AMFI code of conduct for mutual fund distributors
The Code of Conduct sets out how you must deal with every client:
- ✓ Investor first: act in the investor's interest and never let commission decide which scheme you recommend.
- ✓ Know the client: ask about their finances, experience and goals, and do risk profiling before recommending.
- ✓ Explain the risk: walk them through the scheme's key features and risks from the SID and KIM. Say clearly that returns are not guaranteed.
- ✓ Disclose: tell clients the commission you earn on the schemes you recommend and which fund houses you work with.
- ✓ No indicative or assured returns, no churning, no splitting applications, no mis-selling.
- ✓ Fill forms honestly: use the client's own contact details, and put your ARN and the seller's EUIN.
- ✓ Keep records of KYC, risk profiles, suitability and client complaints.
- ✓ Regular plans only: SEBI has said an MFD cannot deal in direct plans for a client. See can a distributor sell direct plans.
For how this works in a real sales conversation, see how to sell mutual funds to clients.
Can a mutual fund distributor give investment advice?
Only "incidental advice". AMFI defines this as basic advice limited to the schemes you recommend, based on the client's risk profile and goals, to help them choose. Goal-based SIP suggestions are fine.
- ✓ Not allowed without SEBI RIA registration: detailed financial planning, holistic investment advice, or using the words "financial planning" or "financial planner" in your marketing.
- ✓ Names you can't use: Adviser, Advisor, Financial Adviser, Investment Adviser, Wealth Adviser, Wealth Manager, Consultant, or IFA, unless you are a SEBI-registered Investment Adviser.
- ✓ Tagline you must use: "AMFI-registered Mutual Fund Distributor" with your name and ARN, in at least font size 12 on printed material.
SEBI rules for mutual fund distributors on social media and advertising
SEBI social media circular (26 February 2026, in force from 1 May 2026): MFDs are named as agents of regulated entities. For securities-market content on YouTube, Instagram, Facebook, WhatsApp, X, LinkedIn, Telegram and others:
- On your profile's home page: show the registered name and number of the principal mutual fund, followed by your own registered name and ARN.
- At the start of each video or post: show the same details. If you hold several registrations, put a link on your profile to a page listing them all.
AMFI's rules on promotion:
- ✓ You can advertise your distribution services, but not with rebates, gifts, "free advice" or "free portfolio review" offers.
- ✓ Use only the AMC's marketing material. Get the AMC's written approval before using its name or logo, or sharing write-ups and performance comparisons that name its schemes.
- ✓ On YouTube and social media, share education only. No scheme-specific recommendations, past-performance claims or return predictions.
- ✓ Never make false or defamatory statements about any AMC, scheme or other distributor.
Due diligence of mutual fund distributors by AMCs
SEBI requires AMCs to run a due diligence check on distributors that meet any one of these:
- ✓ AUM over ₹100 crore across the industry, in the non-institutional category (including HNIs)
- ✓ Commission over ₹1 crore a year across the industry
- ✓ Commission over ₹50 lakh from a single mutual fund
- ✓ Presence in more than 20 locations
It checks your business model, regulatory record, controls, and whether risk profiling is kept separate from sales. AMFI runs a common due diligence on behalf of the AMCs.
Annual self-certification (DSC) for mutual fund distributors
Every year you must submit a Declaration of Self-Certification to AMFI, confirming you followed the rules and the Code of Conduct.
| Date | What happens |
|---|---|
| By 30 June | Submit the DSC online on the AMFI portal |
| From 1 July, if not filed | AMCs withhold all your commission |
| After 30 September, if still not filed | Withheld commission is forfeited |
What happens if a mutual fund distributor breaks SEBI rules?
- ✓ ARN suspension: for a breach of the Code of Conduct, AMFI can suspend your ARN. You can't sell, and earn no commission while suspended.
- ✓ Business moved to Direct Plan: purchases, switches and SIPs under a suspended ARN go to the Direct Plan.
- ✓ Permanent termination: for serious breaches, the ARN can be cancelled for good, and your clients are told to choose another distributor or go direct.
- ✓ Lost commission: through suspension, a late DSC, an expired ARN, or a missing EUIN not fixed within 30 days.
Latest SEBI rules for mutual fund distributors (2025–2026)
| Date | Change |
|---|---|
| 8 August 2025 | SEBI abolishes transaction charges paid to distributors |
| 27 November 2025 | SEBI replaces the old B-30 incentive with a new incentive for new B-30 and new women investors |
| 14 January 2026 | AMFI issues its Master Circular for MFDs |
| 1 March 2026 | New-investor incentive takes effect |
| 1 April 2026 | SEBI (Mutual Funds) Regulations, 2026 come into force |
| 1 May 2026 | Social media name and registration number disclosure takes effect |
SEBI compliance checklist for mutual fund distributors
- ✓ NISM V-A and ARN valid, renewal date in your calendar
- ✓ Empanelled with every AMC you sell
- ✓ Name, ARN and "AMFI-registered Mutual Fund Distributor" tagline on cards, website, app and social media
- ✓ Risk profile and suitability record for every client
- ✓ Commission disclosed to clients
- ✓ EUIN on every advised transaction
- ✓ Only AMC-approved marketing material
- ✓ DSC filed by 30 June
- ✓ Complaint register kept
Stay compliant while you grow
Dhan Saarthi (Khazana Fintech Pvt. Ltd., AMFI ARN-325085): keep 90% of the trail on your clients, one onboarding instead of 40+ AMC empanelments, no upfront or seat fees.
Book a Demo with Dhan SaarthiSources
- SEBI: Securities and Exchange Board of India (Mutual Funds) Regulations, 2026
- SEBI: Transaction charges paid to Mutual Fund Distributors, 8 August 2025
- SEBI: Additional incentives to distributors for new B-30 and women investors, 27 November 2025
- SEBI: Disclosure of registered name and number on social media platforms, 26 February 2026
- AMFI: Master Circular for Mutual Fund Distributors, 14 January 2026
- AMFI: FAQs on Do's and Don'ts for MFDs
- AMFI: FAQs on Mutual Fund Distributors Due Diligence
Mutual fund investments are subject to market risks, read all scheme related documents carefully. Distribution services are offered through Khazana Fintech Pvt. Ltd. (AMFI ARN – 325085). Rules are as of October 2026.
