SEBI Directs MFD Associations to Remove ‘IFA’ from Their Names
The Securities and Exchange Board of India (SEBI) has issued a directive to Asset Management Companies (AMCs) instructing them to inform Mutual Fund Distributor (MFD) associations that they must eliminate the term ‘IFA’ (Independent Financial Advisor) from their association names.
This mandate requires MFD associations to undergo a name change if their association’s title includes the term ‘IFA’ or ‘independent financial advisor.’ SEBI Chairperson Madhabi Puri Buch emphasized that AMCs have already been instructed to communicate this directive to MFD associations and ensure compliance.
Chairperson Buch announced this decision during the ARIA event held in Mumbai today. She also highlighted specific instances of malpractices within the industry, including Registered Investment Advisors (RIAs renting out their licenses, which is prohibited, and a direct plan platform receiving advertisement income from an AMC directly tied to the business volume it generates.
While addressing these concerns, Buch also recognized the positive contributions of RIAs and expressed SEBI’s goal of fostering 10 lakh RIAs dedicated to safeguarding the interests of investors.
Ganesh Kumar
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