Change of broker in mutual funds: the forms and the transfer rules
Moving a client, or a whole book, to a different ARN can happen two ways. Which route you take decides whether trail commission keeps flowing or stops for a year, so it is worth knowing both before the first form is signed.
An investor can move to a new distributor at any time with the change of broker form and no NOC from the old one. The new distributor’s trail can start only after a 12-month cooling-off, at the lower of the two commission rates.
A distributor moving their whole book, including a sub-distributor leaving a principal ARN with the entire AUM, keeps trail flowing with no cooling-off, provided both sides certify the transfer and clients get 15 days’ notice.
The forms are below. See also moving from a principal ARN to your own.
Download the change of broker form
CAMS and KFintech each publish a change of broker form, and both follow the standard format AMFI prescribes. Use the one for the registrar that services the fund house in question.
The form asks for the folio number, which is mandatory, and the scheme names if the change covers only some schemes. It needs the old and new ARN, the new distributor’s EUIN and a sub-distributor ARN where one applies. The investor declares the request is voluntary and signs as per the mode of holding, and the new distributor signs a declaration that no inducement was used. Once processed, the request cannot be revoked; reversing it needs a fresh form.
Route 1: the investor asks for the change
Under SEBI’s circular of 11 December 2009, fund houses must act on an investor’s instruction to change distributor, or to switch to a direct plan, without asking for an NOC from the existing distributor. The holdings are then delinked from the old ARN and tagged to the new one.
- The investor signs the change of broker form. The registrar verifies the wet signature before acting on it.
- On T+1 the registrar sends the investor an SMS naming both distributors, with 3 days to object. The incoming distributor may get a similar email with the same 3-day window.
- With no complaint, the change is effected on T+11 and a confirmation goes to the investor and both distributors.
Trail commission. AMCs may pay trail to the new distributor after a cooling-off period of 12 months from the date the code changes in their records. AMFI introduced a six-month period in March 2024 and extended it to 12 months from 11 August 2025; before March 2024, no trail was paid on assets moved this way at all. Payment is at the lower of the old and new distributor’s rate, and no other incentive is paid on the transfer.
A switch back to the original distributor within the 12 months restarts the clock. AMFI’s own example: a code changed from A to B on 25 August 2025 earns B trail from 24 August 2026, and a move back to A on 25 June 2026 means A waits until 24 June 2027.
Route 2: the distributor moves the book
A distributor can ask for the ARN code on their clients’ folios to change in three situations only:
- a change in name or legal status, such as an individual becoming a partnership, or a firm becoming an LLP;
- a merger, acquisition, consolidation or transfer of business;
- a sub-distributor under a principal ARN holder moving out, provided the entire AUM of the sub-distributor moves and both the sub-distributor and the principal certify that to the AMC.
The requesting distributor needs a valid ARN, KYD compliance and current self-certifications. They write to every client explaining the change and the new distributor, telling them to write to the AMC within 15 days if they object, and then file a request with each AMC carrying the reason, supporting documents and the client list. With no objection, the AMC changes the code after 15 days from receiving the request.
Trail continues prospectively on the valid transferred assets. A change of legal status or a merger keeps the transferor’s rate, while a sub-distributor transfer is paid at the lower of the two rates, and transferred trail stays subject to the clawback rules that applied before.
The two routes side by side
| Investor-initiated | Distributor-initiated | |
|---|---|---|
| Who starts it | The investor | The existing distributor |
| NOC from the old distributor | Not required | Not applicable |
| Scope | Any folio or scheme the investor names | The full book (for a sub-distributor, the entire AUM) |
| Investor's role | Signs the request form | Gets 15 days' notice to object |
| Trail to the new distributor | AMCs may pay it after a 12-month cooling-off | Continues prospectively, no cooling-off |
| Trail rate | Lower of the old and new distributor's rate | Same rate for a change of legal status or a merger; lower of the two for a sub-distributor move |
Moving from a principal ARN to your own
Many distributors hold their own ARN but transact as a sub-distributor under a larger platform or national distributor’s principal ARN. Leaving that arrangement is where the two routes matter most.
The whole-book route keeps your trail uninterrupted, at the lower of your rate and the principal’s, but it needs the principal to certify that your entire AUM is moving. Without the principal’s certification, clients can still move one at a time through the change of broker form, and each moved folio then waits out the 12-month cooling-off before trail can resume.
Before starting either route, export a folio-level client list with scheme-wise holdings, and keep the last year’s commission statements. You need the list for the client letters and the AMC requests, and the statements are how you check the first payouts under your own ARN against what you earned before.
We build distributor platforms with commission reconciliation, and can add folio-level transfer tracking so the move ends with your clients, data and trail history in a system your firm owns.
What your platform should track during a transfer
A book of a few hundred clients spread across dozens of fund houses and two registrars does not move on a single day. These are the records that keep a transfer from turning into months of spreadsheet chasing.
ARN status per folio
Every folio in a transfer is old, pending or moved at any point, and across several AMCs and two registrars it rarely moves in one go. The platform should show each folio's state so nobody chases a client who has already been switched.
Cooling-off end dates
For investor-initiated changes, store the date the ARN code changed in the unitholder database and the date the 12-month cooling-off ends. That is when trail can start, and a reversal within the period restarts the clock.
Lower-rate reconciliation
Transferred trail is paid at the lower of the two distributors' rates as on the transfer date. Reconcile the first payouts against that rate, or a shortfall reads as an AMC error when it is the rule working as written.
Objection tracking
Log every client objection received during the 15-day notice period and the AMC it was passed to. Distributors are required to inform the AMC immediately, and a clean log protects you if a client later disputes the move.