Change of Broker in Mutual Funds
Aug 3, 2025
The AMFI circular dated 30 July 2025 doubled the cooling-off period for commissions when an investor shifts to a new distributor. If you plan to onboard such clients, or your existing clients are thinking about switching away, this guide gives you every rule and workflow you need to know.
What exactly is a Change of Broker?
ARN (AMFI Registration Number) identifies the distributor on each folio.
A change of broker, also called an ARN transfer, updates that code in the RTA database.
Units stay untouched. Only the “service provider” field on the folio changes.
Why do investors request a switch?
Better digital tools or dashboard support
Relocation or retirement of their current advisor
Need for niche expertise, for example NRI tax or goal-based planning
Service gaps such as delayed statements or poor follow-up
Understanding these triggers helps you position your own offering before, during, and after the 12-month freeze on trail commissions.
Regulation timeline
Year | Circular | Key change | Cooling-off before new trail |
|---|---|---|---|
2010 | No trail allowed to new MFD | N/A | |
5 Mar 2024 | Trail allowed after waiting period | 6 months | |
30 Jul 2025 | BP 112-a | Cooling-off period extended | 12 months |
Current rules (effective 11 Aug 2025)
New distributor earns trail only after 12 months from ARN-change date.
RTA sends investor an SMS on T + 1 day; investor has 3 days to object.
If no objection is raised, ARN updates on T + 11 day.
If the investor flips again within those 12 months, the clock restarts.
Step-by-step process for distributors
Collect folio details – number and, if needed, scheme names.
Fill Annexure A – include old ARN, new ARN, EUIN, and holder signatures.
Submit to RTA or AMC – physical form or scanned copy with e-sign.
Track the SMS window – verify the investor received T + 1 alert.
Confirmation on T + 11 – keep a copy of the email for compliance.
Serve during cooling-off – provide reports and reviews even while trail is on hold.
Practical tips to handle the 12-month freeze
For you (incoming MFD) | For the outgoing MFD |
|---|---|
Set clear expectations on when trail starts. | Continue high-quality service until the ARN actually changes. |
Automate value adds – portfolio reviews, capital-gains reports. | Use the transition to showcase professionalism; it can win back clients later. |
Document every consent and communication for audit readiness. | Maintain records to reconcile commission credits during freeze. |
FAQs for distributors
Q: Does the investor pay a fee to switch?
A: No. The application is free; only the commission flow changes.
Q: Can only one scheme be moved?
A: Yes. List specific scheme names in Annexure A.
Q: Is e-signature acceptable?
A: Yes, provided it matches RTA standards and KYC records.
Q: Will ongoing SIPs be affected?
A: Investments continue as normal; only commission credit is delayed.
Wrap up
The longer cooling-off is designed to curb churn, but it also gives diligent distributors a window to demonstrate superior service.
Ready to streamline broker-code transfers? Book a Creso demo today.