Registrar and Share Transfer Agents To Facilitate Transactions in Mutual Funds

Bhaskar Goyal 
on 01 August 2019


Mutual Funds involve a series of paperwork which acts as proof, security or reference in the future. In the Mutual Fund market, investors make transactions such as buy, sell or switch shares on a frequent basis for which they need to have a record.

Who safeguard the records of Mutual Fund Companies?

It is SAG RTA who is responsible to safeguard the records of most Mutual Fund Companies and are known as Registrar and Transfer Agent. The write-up has more details about registrar and transfer agents, who they are and how they help the investors?

Definition of Registrar & Share Transfer Agents

Mutual Funds, public-traded companies or other financial institutions offer shares to potential investors. The registrar and transfer agents are associations framed for the purpose of preserving the transaction records of the investors for the ease of the companies or mutual fund houses.

Some companies prefer their own transfer agents while most choose a mediator such as a bank to perform the task. The way to find out the company?s transfer agent is by visiting the investor relations segment visible on the company?s website.

A Study on R&T Agents for Mutual Funds

Investors are involved in daily transactions related to Mutual Funds such as purchase, sell or shift units, therefore it is a task for the mutual fund houses to maintain an accurate inventory of the transactions. This situation calls for an expert to skillfully handle a huge database of the transactions. The mutual fund company may reach out to outside sources for help or give the charge to R&T agents to manage the records of the investors on account of the company.

R&T agents ace in services for investors, distributors, and Asset Management Companies (AMC).

Investors are served with explicit account statements of the mutual fund companies looked up by on Websites of SAG RTA Registrar and Share Transfer Agent?Also, an investor can reach out for help from R&T agents.

Registrar and Transfer Agent is serving as a mediator in the scenario. They are in between the investor and the mutual fund company. R&T is rooted all across the nation. They are a service for investors who need any support related to investments or transactions.

R & T Agents help the investor population who ask for:

  • Coming-up or existing offers related to mutual funds, profits and maturity dates for Fixed Maturity Plans.

  • Forms of Mutual Fund Houses.

  • Completing their transactions. This is the same as an investment with the mutual fund directly.

  • Their account statements.

Please Note: R&T does not charge directly from the investors rather get paid by the mutual fund companies who reclaim the charges from the investors.

Many purposes are served on a single desk for the investors. Registrar & Share Transfer Agent allows all the information related to offers in different schemes of different mutual fund companies.

Who is the one known as a distributor of Mutual Funds?

Distributor - Individual who guides with transaction processing under Mutual Funds. He serves both applicant and shareholders. The distributor is never an advisor. Both have different roles to play.

A couple of years back, independent distributors flourished on salesmanship. They scrutinized potential investors for a commission, which they were paid by the funds collected via entry fee charged to fresh applicants. In 2009, SEBI discontinued such practices.

SEBI has a plan to boost investments in mutual funds:

  • Direct Plan - The net asset value will be higher than?distributor plan.

  • Distributor Plans - The net asset value will be lower (about 0.5%).

Insurance agents, distributors or brokers are not the advisors. These groups simply represent the product and earn their commissions from the mutual fund companies.

An advisor is the one giving advice on wise investments. Whether it is buying, selling or switching the shares. The advisor never gets compensations from mutual funds but are liable to charge from investors on giving advice.

To become a qualified distributor one must possess:

  • Acquirer?s Reference Number or ARN code from the Association of Mutual Funds in India (AMFI)

  • A valid certificate from the Association of Mutual Funds in India (AMFI) obtained on clearing AMFI Mutual Fund module. Valid before June 01, 2010.

  • A genuine certificate from the National Institute of Securities Markets (NISM) obtained on clearing the NISM certification examination on or after June 01, 2010. Visit www.nism.ac.in

  • Enrolling as a distributor with the required mutual fund company.

  • Distributors can be anyone from the group of individuals, companies, societies, co-operatives, sole proprietorships, trusts and partnership firms.

  • HDFC Mutual Fund Distributor has depicted the fundamentals of becoming a Mutual Fund Distributor.

Application form showing distributor or broker Information.

Mutual Fund Distributor ARN Number

Know how Distributors of Mutual Funds are related to Registrar & Transfer Agent

R&T agents jump into the scenario to help the distributors selling or purchasing funds on behalf of their customers. The distributor can easily reach out to R&T website to submit their application form (they need to obtain a scanned copy through a scanner installed in the agent?s office), there is no need for R&T agent to rush to R&T?s office by 3 PM (3 PM is the time limit to submit an application to get the day?s net asset value). The agent can even obtain the account of sales done by him in between two different dates. He can obtain the accounts on a monthly or quarterly basis.

Now the distributor can simply register his requirements on R&T?s website and receive the reports within hours. To serve more, R&T has launched know your customer forms for investors and know your distributor forms for distributors. R&Ts like have reached out to serve insurance companies as well.

Know how R&T agents can support Mutual Funds Companies

Registrar Transfer Agent has proved to be cost-effective for the mutual fund companies as R&T has branches across the nation and the company no longer needs to set up branches to serve their customers.

R&Ts rely on digital communication may it be account statements, newsletters or other communications from AMC on behalf of distributors or investors. Therefore most mutual fund houses provide you account statements on your email id directly.

R&T services charge from the companies which the companies reclaim from its customers (as an annual cost that Mutual Funds charges). For equity funds, the cost is 10 basis points or bps, for debt funds 5-7 bps and for liquid funds, it is 3 - 4 bps.


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