Mutual fund intermediaries request consolidation of registration numbers following recent regulatory updates

Mutual fund distributors who previously maintained multiple AMFI (Association of Mutual Funds in India) registration numbers are now approaching asset managers to combine these accounts. This operational shift comes after revised rules set by Sebi (the Securities and Exchange Board of India, the primary markets regulator) eliminated the specific Goods and Services Tax benefits that previously favored the practice of splitting commissions across multiple registrations. Historically, intermediaries split commissions across various registration numbers to manage tax liabilities under specific framework interpretations.

Under the earlier position, distinct registrations offered certain GST-related advantages for commission payouts. The new regulatory position removes this utility entirely, rendering multiple registrations redundant and prompting intermediaries to streamline their administrative structures into single accounts with asset management companies. Distributors and financial intermediaries should audit their existing registration accounts, coordinate with asset management companies to execute the consolidation, and update internal compliance records accordingly.

Tax professionals must verify that client billing and commission receipts reflect the unified registration setup to avoid reporting discrepancies. Bottom line: consolidating registrations eliminates unnecessary compliance overhead now that the tax arbitrage has been removed.