Mutual Fund investments need investors to be KYC compliant. Whether you are a new MF investor or an old one, being KYC compliant is mandatory. However, from April 1, the list of documents officially accepted as proof of identity or address will narrow down.
The Securities and Exchange Board of India (SEBI) has made it compulsory for investors to complete Know Your Client (KYC) formalities before investing in mutual fund schemes.To initiate investments in a mutual fund, investors are required to fill out a KYC form and submit valid proof of identity (POI) and proof of address (POA) documents. These documents are then registered with one of the KYC Registration Agencies (KRAs) by the fund house or a SEBI-registered entity if not already available in the KRA records.
Acceptable POI documents include Aadhaar, passport, driving licence, voter ID card, NREGA job card, or any other document authorized by the Union government in consultation with the regulator.
It is important to note that starting from April 1, bank statements or utility bills will no longer be considered valid documents for completing the KYC process, states an ET report.
Investors have the option to complete their KYC online through Aadhaar-based e-KYC, eliminating the need to visit physical locations such as fund houses, registrars, or distributors. This online process involves verifying investor credentials by sending an OTP to the mobile number linked with Aadhaar.
Additionally, investors must have a mobile device with necessary permissions enabled for camera, location, and microphone access. Uploading a self-attested PAN copy and a signature image on plain paper are also part of this digital KYC process. Once KYC is successfully completed, investors can begin investing in mutual funds.
For investors who previously completed KYC using bank statements or utility bills, but now wish to open a new account or folio, they must undergo a fresh KYC process and submit physical documents to registrars to comply with the updated regulations.
However, investors whose KYC records are validated through PAN-Aadhaar seeding, and whose email and mobile number are verified by the KRA, can continue transactions in the securities market with their current intermediary. This allows them to proceed with investment plans or redeem from existing folios.
It is crucial for investors, even those with old mutual fund investments made before KYC became mandatory, to ensure KYC compliance. New investments cannot be made without a valid KYC, and the same applies when requesting redemptions. All holders in a folio must be KYC-compliant, and in case of the demise of a unitholder, the beneficiary or nominee must also be KYC-compliant for the transfer of units.
The Securities and Exchange Board of India (SEBI) has made it compulsory for investors to complete Know Your Client (KYC) formalities before investing in mutual fund schemes.To initiate investments in a mutual fund, investors are required to fill out a KYC form and submit valid proof of identity (POI) and proof of address (POA) documents. These documents are then registered with one of the KYC Registration Agencies (KRAs) by the fund house or a SEBI-registered entity if not already available in the KRA records.
Acceptable POI documents include Aadhaar, passport, driving licence, voter ID card, NREGA job card, or any other document authorized by the Union government in consultation with the regulator.
It is important to note that starting from April 1, bank statements or utility bills will no longer be considered valid documents for completing the KYC process, states an ET report.
Investors have the option to complete their KYC online through Aadhaar-based e-KYC, eliminating the need to visit physical locations such as fund houses, registrars, or distributors. This online process involves verifying investor credentials by sending an OTP to the mobile number linked with Aadhaar.
Additionally, investors must have a mobile device with necessary permissions enabled for camera, location, and microphone access. Uploading a self-attested PAN copy and a signature image on plain paper are also part of this digital KYC process. Once KYC is successfully completed, investors can begin investing in mutual funds.
For investors who previously completed KYC using bank statements or utility bills, but now wish to open a new account or folio, they must undergo a fresh KYC process and submit physical documents to registrars to comply with the updated regulations.
However, investors whose KYC records are validated through PAN-Aadhaar seeding, and whose email and mobile number are verified by the KRA, can continue transactions in the securities market with their current intermediary. This allows them to proceed with investment plans or redeem from existing folios.
It is crucial for investors, even those with old mutual fund investments made before KYC became mandatory, to ensure KYC compliance. New investments cannot be made without a valid KYC, and the same applies when requesting redemptions. All holders in a folio must be KYC-compliant, and in case of the demise of a unitholder, the beneficiary or nominee must also be KYC-compliant for the transfer of units.