Mutual Funds710 views
Mutual fund, as we all know, is a pool of money spread across stocks, bonds and money market instruments. Market downturn risks are averted to a great degree via mutual funds as money gets spread around in various securities. Like fixed deposit, postal deposit and recurring deposit, mutual funds can also be a useful saving option. But have you ever wondered about Know Your Client (KYC) compliant of mutual funds? If no, then read the post carefully and get used to the process related to the buying of mutual fund.
An individual is required to have a PAN, bank account, as well the KYC compliant. KYC is necessary to conform to the norms laid down by the Securities and Exchange Board of India (SEBI), the market regulator, with respect to the Prevention of Money Laundering Act (PMLA), 2002. The investor-friendly KYC process of mutual funds is same across several other intermediaries regulated by the SEBI in the securities market, like depository participants, portfolio managers, venture capital funds, stock brokers, collective investment schemes. Thus, duplication of the KYC process is avoided with a single KYC. The norms do change from time to time.
Changes in KYC norms with effect from Jan 2012
- First, there has been an implementation of Centralized KYC registration process through KYC Registration Agencies (KRAs) registered with the SEBI. Every investor is required to conform to the same KYC process only once in the securities market.
- It is mandatory for the mutual fund companies to undertake In Person Verification (IPV) for the investors making investments after Jan 1, 2012, during the time when KYC application request would be submitted.
- The CDSL Ventures Ltd (CVL) has uploaded the KYC information of mutual fund investors having done their KYC through CVL MF till Dec 31, 2011 in its KRA System (CVL-KRA) with the status that reads “MF – VERIFIED BY CVLMF”.
- Intermediaries must highlight missing information while uploading KYC data into the KRA system.
- Latest passport size photograph
- Identity Proof-PAN Card/Aadhaar Card/Passport/Voter ID/Driving License
- Address Proof-Passport/Driving License/Ration Card/Registered Lease/Sale Agreement of Residence/Latest Bank Account Statement/Recent Telephone Bill/Latest Electricity Bill
- You are required to self-attest these documents and send them along with their originals for verification. Failing to do the same will require you to get the documents attested by the authorized entities.
- Resident Indians can get the documents attested by Gazetted Officer, Notary Public, etc.
- Non-resident Indians (NRIs) can approach authorised officials deputed at overseas branches of scheduled commercial banks registered in India, court magistrate, Indian embassy in their respective country, judge for attestation of the documents.
Investors, who have filed their applications, can view the status on KYC compliance with any KYC Registration Agency.