What happens to trail commission if a distributor’s ARN lapses?

Lesson 47 of 50 for advisers · When commission stops · 3 min read · Reviewed 13 Nov 2026

Quick answer

The ARN becomes invalid and trail is withheld. It is released if you renew within 3 months. Missing the annual self-declaration by 30 June also withholds commission from 1 July, and missing 30 September forfeits it. A suspension for breaking the code of conduct forfeits commission and moves SIPs and STPs to Direct.

The annual self-declaration is due by 30 June. Miss it and commission is withheld from 1 July; miss 30 September and it is forfeited.

A lapsed ARN stops trail. Renew within 3 months and the withheld trail is released.

An ARN can be renewed up to 6 months before expiry, but only after the NISM certificate is renewed.

If a distributor breaks the rules, fund houses stop new business and commission until it complies. During a suspension new and existing SIPs and STPs go to Direct.

Key idea: Put three dates in the calendar: NISM renewal, ARN renewal and 30 June.

Sources

Try the short quiz on this page to check what stuck.

Common questions

Who reports code breaches?

Fund houses report them to SEBI and AMFI.

How long is an ARN valid?

Three years.

What does renewal cost an individual?

₹1,500 plus 18% GST for mutual funds only.

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