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Yogi Zone

Useful articles for your finance management by our team of experts

Mutual Fund KYC Status

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Making an informed investment decision is a pre-requisite for treading towards investment goal but being informed about the regulatory reforms makes your investment journey hurdle free.  In this piece, an effort has been made to keep the investors conversant with the mandates of ‘Know Your Customer’ (KYC) regulations for the mutual fund industry along with information on Mutual Fund KYC Status.

Why KYC is important?

KYC is increasingly becoming important in the financial domain in order to prevent money laundering, financial fraud, misuse of identities and terrorist financing. It is important for financial institutions to get a better understanding of the financial transactions of each client, so that they can timely avert or track down dealings of illegal nature. It is worthy to note that newer reforms seem to be discouraging as it would upset the investors, however, in the long run these reforms are aimed to actually safeguard money.

In Person Verification (IPV)

Earlier, w.e.f. January 1’2011, SEBI had mandated compulsory KYC for all transactions irrespective of the investment amount, which was mostly followed by a large part of diligent investors. However, later in the year 2012, SEBI has again brought up additional regulation to standardize KYC procedures across all its entities, which includes Mutual funds, stock broking firms, depository participant, etc.

Precisely, investors who have completed KYC compliance before January 1’2012 are required to walk in-person to Mutual Fund/CAMS offices or KYD compliant distributors to verify their details like income, net worth and marital status etc. along with the duly filled form(s) and documents.

How to know if your KYC is complete?

If you are unaware of when you had last done your KYC or whether you have to go through IPV or not, it’s better to check your existing Mutual Fund KYC status. All you need to do is to simply enter your PAN card details here (CDSL Ventures Ltd ) to get your KYC details. If your KYC status date reflects any date before January 1’2012, then it means that your KYC details are incomplete and that you have to comply with stated new KYC formalities.

Apart from this, investors can get in touch with their existing Mutual Fund customer care to exactly know about their KYC compliance status and the process ahead.

Implications on your investments?

Since new reforms came into effect from  1st December ‘2012, it is important to know how it affects your investments until you complete the process.

(A)  Existing investments – Investors who wish to invest under existing folios will not face any issue as they can continue to invest and can comply with new KYC process at their own comfortable time.

(B)  New investments – In case, investors wish to invest with the fund house where they do not hold any investments, then they have to comply with new formalities in order to go ahead with their fresh investments.

Process for new KYC Compliance
mutua lfund kyc process
(1)   Fill the form – You can download the new KYC form here or you can get it from any of the mutual fund branch offices. Section B of the new KYC form has to be filled compulsorily which asks for details like Father/Spouse name, Marital status, Nationality and Gross annual income.

(2)   Submit the documents – The new KYC form has to be submitted along with a valid ID proof, Address proof and two photographs. Copies of the original document are required to be on A4 size paper and self-attested.

(3)   In Person verification (IPV) – As explained earlier, an investor has to get though IPV process. For this, an investor has to visit any mutual fund office or scheduled commercial banks personally or ask a KYD compliant distributor to collect and submit verified documents, on your behalf, to KRA’s (KYC registration agency).

(4)    Acknowledgement – After you complete the IPV and KYC process, you will be provided with the acknowledgement by the KRA which will allow you to invest freely across all mutual funds.

(5)   Centralized updation – As per the guidelines set by SEBI, the new KYC details have to be updated into the centralized system within 20 days of receipt of the form which could be readily accessed by other KRA’s at any point of time.

Benefit of New KYC compliance

The new KYC compliance has been brought in with the purpose of streamlining the verification process across the SEBI regulated intermediaries. Unlike earlier, when KYC had to be separately done for investing in the stock market or opening a demat account, the new reform aims at creating uniform KYC among all intermediaries in the financial market. So, if you have complied with the new KYC in mutual fund, then you can also invest in the stock market while doing away with any further documentation.

New Investors

Those investors who are planning to enter the financial market have to only fill the new KYC form with supporting documents and post in person verification they can start their investments across the products hassle free.

Change of information

If after complying with the new KYC formalities, an investor wishes to record any change in his existing KYC details, then he has to fill the KYC change form (Downloaded from mutual fund sites/ CAMS/Karvy Site) The altered details need to be supported by valid self-attested document like latest address proof in case of change of address. Additionally, a self attested copy of Pan card is also required to be submitted. It’s recommended to submit copies of documents in A4 size paper and originals to be carried wherever required.

Final Word

Although the new KYC is meant for new investors or for fresh investments in new funds, still it is prudent that every individual should go through this process so that investments could be swiftly done across any mutual fund scheme at any given point of time.

About the Author:

Reenika is a Certified Financial Planner and has more than 6 years of experience in the financial service industry. She can be reached at expert@investmentyogi.com

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