Individual channel

A mutual fund distributor can be a single person working alone, or a large organisation with hundreds of staff. The workbook splits distribution into two channels on exactly this line.

The individual channel is the single-handed agent — the model India has used since the days of LIC and UTI agents selling door to door. Even today, a large share of distribution runs this way: one person, one ARN, little or no staff.

Everything that is not that is the non-individual channel — banks, national distributors, and other institutions that distribute through employees rather than as a single person. That difference is not just descriptive; it decides how a person is allowed to identify themselves when selling.

The identification mechanism differs by channel (Chapter 6). An individual distributor must personally hold an AMFI Registration Number (ARN), for which the minimum age is 18 years, and must personally have passed NISM certification (or qualified via the CPE route).

An employee of a non-individual distributor does not get a separate ARN. Instead, the institution itself is AMFI-registered, and each selling employee must clear the NISM exam and obtain an Employee Unique Identification Number (EUIN), quoted on every application form for that employee's clients. There is no separate ARN required for the employee — they operate under the institution's own ARN.

So the individual channel is defined by a person carrying their own registration number; the non-individual channel is defined by an institution's registration number carried by many employees, each individually identified only by an EUIN.

Illustrative — the ARN/EUIN codes and rupee figures are constructed to show the mechanism.

Ramesh works alone from a small office, selling mutual funds under his own ARN-045678, with a book that generates about Rs 6,00,000 a year in trail commission, paid straight to him. He is the individual channel.

Across town, a private bank distributes mutual funds through 40 relationship managers, all operating under the bank's single institutional ARN-000512, which together bring in Rs 3.2 crore a year in trail commission paid to the bank. Each relationship manager separately holds an EUIN, say E123456, which must appear on every application form they process — but none of them has an ARN of their own, and none of them is paid commission directly. If a relationship manager's advice is later questioned, the EUIN pins the specific individual who sold it, even though the empanelment and the Rs 3.2 crore both sit with the bank under one ARN.

Chapter 6 (Fund Distribution and Channel Management Practices), section 6.2.1, introduces the individual channel and its historical roots in LIC and UTI agency distribution, immediately before covering banks and national distributors as the non-individual channel. Expect a question on whether ARN or EUIN applies to a described distributor, which turns on exactly this individual/non-individual line.

• An individual distributor needs an ARN; an employee of a non-individual distributor needs an EUIN, not a separate ARN.
• "Individual" describes the legal nature of the distributor, not the size of their business — a single-handed agent who later hires staff still starts in this channel and may migrate out of it.
• The minimum age of 18 applies to obtaining an ARN, which is only directly relevant to the individual channel; institutional ARNs belong to the entity, not a person.