What is AMFI: What are its Role, Objectives and Importance?

Apart from investing directly in any financial instrument, there is another route called mutual funds, through which you can invest your money in financial markets. Mutual funds are equity-linked investment schemes offered by mutual fund houses and asset management companies (AMCs). However, the funds also consist of stocks, bonds and other investable securities offered through different schemes.

All these fund houses and asset management companies are registered with the Securities and Exchange Board of India (SEBI). All these fund houses and AMCs have come to together to form an association called as AMFI or Association of Mutual Funds in India. This article focuses on AMFI, its role, functions and objectives, with the importance of AMFI in the mutual fund industry.

What is AMFI in a Mutual Fund?

Established in 1995, AMFI is a self-regulatory body of the mutual fund industry. It is a non-profit organisation that works for all mutual fund houses and AMCs registered with SEBI. AMFI acts for the promotion and development of the mutual industry with the objectives to safeguard investor’s funds and educate the investors about the mutual funds and their importance.

Recommended Read: Meaning and Role of AMFI

How Does AMFI Work?

AMFI is a self-regulatory body that represents all registered fund houses and AMCs in India. It also acts like an intermediary between the mutual fund industry and the regulatory body to ensure everything runs as per the regulatory frameworks and compliance formulated for such fund houses.

Apart from establishing the ethical code of conduct and regulatory guidelines, it also ensures the protection of investors’ funds while educating them about the mutual fund industry. It is playing an important role in revolutionising the mutual fund industry and the importance of investing through mutual funds.

What are the Roles and Functions of AMFI?

The role of AMFI in the mutual fund industry is like playing a non-regulatory body to monitor the various activities, including promotional actions, ensuring the operations of regulatory frameworks, and increasing awareness and knowledge among the investors. AMFI plays multiple roles in different areas with the main motive of promoting the mutual fund industry.

Role of AMFI in Mutual Fund:

Promoting the ethical and professional code of conduct 

It is one of the most crucial and important roles, AMFI is responsible for setting the standards for the ethical and professional code of conduct for the mutual funds and AMCs participants. AMFI keeps monitoring the various actions in the industry and identifies if any discrepancies or unfair practices are conducted in the MF industry.

AMFI also ensures all the participants must be registered with SEBI and legally authorised to operate while complying with the regulatory guidelines by the regulatory authorities. AMFI takes strict action against any misconduct, including imposing penalties and suspending membership.

Ensuring Transparency and Accountability

Another key role AMFI plays in MF is ensuring the smooth running of the industry with complete transparency while offering services to the end-users. It makes sure that all the transactions and the service providers conduct dealings in the MF industry with full accountability. Furthermore, AMFI is also responsible for making the investments through MF more accessible to everyone.

Growth and Development in the MF Industry

AMFI also plays a big role in promoting and growing the mutual fund industry in India through various offline and online promotional activities like ads, events and seminars, etc. It also promotes and facilitates the adaptation of online platforms to enchance the ease of investing in various schemes.

AMFI follows various routes of promotions like print media, online media, mass communication, social media, and other means of communication to support the MF industry. AMFI actively advertises mutual funds, showcasing their benefits and importance to encourage industry growth throughout the country.

Education and Awareness Among Investors

To increase the awareness among investors, AMFI also runs a nationwide educational programme to increase the presence of mutual funds in the country. Apart from this, it also organises seminars, campaigns and academic partnerships with educational institutions to increase awareness among investors.

It also focuses on keeping the young investors and other categories of investors aware of the benefits and importance of investments in the mutual funds. AMFI also targets new investors with more emphasis on investing in the low-cost, transparent and fully regulated financial instruments.

Ensuring the Grievance Redressal of the Investors

Last but not the least, it plays a big role in grievance redressal of the investors. Apart from ensuring safe investments, it also addresses the issues of the investors and solves their problems. AMFI receives the complaints and disputes between the fund houses and investors. It works like an intermediary between the investors and MF distributors, ensuring the resolution of various arguments.

Recommended Read: How to Invest in Mutual Fund Schemes?

Objectives of the Association of Mutual Funds in India

One of the main objectives of AMFI in India is to promote the mutual fund industry while ensuring the interests and funds of the investors. However, there are multiple more objectives of AMFI, making it an independent but responsible organisation to support the mutual fund industry.

Ethical Standards: Defining and maintaining the services offered in a highly professional manner with ethical standards, especially in the field of operations in the MF industry.

Code of Conduct: Another objective is to promote and recommend the best business practices and code of conduct to be followed by all the entities involved in the mutual fund offerings and related services.

Interaction with SEBI: Representing all the matters related to the mutual fund industry to the regulatory authority SEBI, while ensuring the interaction between SEBI and MF.

Representing the Government: Also representing all matters concerning the Mutual Fund Industry with Government authorities, Reserve Bank of India and other government bodies.

Investor Awareness: To promote more people to understand about the mutual fund industry through running nationwide investor awareness programme.

Dissemination of Information: Sharing information about the MF industry through independent research and studies with the relevant authorities and other eligible bodies.

Disciplinary Actions: To keep regulating the code of conduct on MF distributions, including disciplinary actions like cancellation of memberships or suspension of registration.

Protection of Investors: Protecting the interests of investors and mutual fund unit holders in terms of ensuring their funds are invested in the MF industry with complete safety and transparency.  

Conclusion: Why AMFI is Important?

AMFI is important to keep an eye on all the participants in the mutual fund industry, mainly on the code of conduct and operational activities of the MF houses and AMCs. It also keeps promoting the importance and benefits of investing through mutual funds to support the growth of the industry. It also ensures the funds and interests of the investors by monitoring the discrepancies or unfair practices.

AMFI is also important in playing a significant role in acting as a self-regulatory mediator between the mutual fund houses and regulatory authorities like SEBI. It ensures mutual fund companies work transparently and adhere to rules and regulations formulated by SEBI, while educating the investors and promoting the awareness among the people about safe investing through mutual funds.

• Author: Religare Broking
• Last Updated: September 8, 2025