What
is KYC?
KYC is an acronym for “Know Your Client”, a term commonly used
for Client Identification Process. SEBI has prescribed certain requirements
relating to KYC norms for Financial Institutions and Financial Intermediaries
including Mutual Funds to ‘know’ their Clients. This would be in the form of
verification of identity and address, providing information of financial
status, occupation and such other demographic information. Applicant must be
KYC compliant while investing with any SEBI registered Mutual Fund.
Back to top
What
are the KYC requirements for a Mutual Fund Investor?
Individual investors will have to produce their Proof of identity (Photo PAN
card copy or PAN card copy and copy of the passport, driving license, etc.) and
Proof of Address (any valid documents listed in Section B of the KYC
Application Form for Individuals). Non-Individual Investors will have to
produce certain documents pertaining to their constitution/registration to
fulfill the KYC process. A list of Mandatory Certified Documents to be
submitted can be found in Section C of the KYC application form for
Non-Individual Investors.
Back to top
Where
and how does one get to be KYC Compliant? Does the investor have to repeat the
KYC process with every Mutual Fund?
The Mutual Fund Industry has appointed CDSL Ventures Limited
(“CDSL”), a wholly owned subsidiary of Central Depository Services (India)
Limited, to carry out the KYC compliance procedure. CVL through its Points of
Service (PoS) will accept KYC Application Forms, verify documents and provide
the KYC Acknowledgement (across the counter on a best effort basis). The list
of PoS will be displayed on the websites of Mutual Funds, CDSL and AMFI. Once
the KYC is duly completed in all respects, the investor needs to produce a copy
of the acknowledgement to the fund where the investor desires to invest. There
is no need to repeat the KYC individually for each mutual fund.
Back to top
What
is a KYC Application Form?
KYC Application Forms have been designed for Individual and
Non-Individual Investors separately. The soft copy of these KYC forms will be
made available on the website of all mutual funds, AMFI and Central Depository
Services (India) Limited (CDSL). You may also approach your distributor for a
form. It is important to read the instructions printed on the KYC Application
Form while filling-up the form.
Back to top
Should
the investor visit PoS personally to obtain KYC Compliance?
No. If the investor is not in a position to visit PoS
personally, the KYC Application Form along with the necessary documents
(including originals if the copies are not attested) can be sent through the
distributor or representative, who can arrange to fulfill the KYC obligation
and obtain the KYC Acknowledgement through any of the PoS.
Back to top
From
what date is it mandatory for an investor to be KYC Compliant?
With effect from February 01, 2008 any investor investing Rs.
50,000 and above would be required to be KYC compliant.
Back to top
To whom
is KYC applicable? Is there any exemption?
Currently, all investors (Individuals or Non-Individuals) who
wish to make an investment of Rs. 50,000 or above will be required to be KYC
Compliant. This would also apply to new Systematic Investment Plan (SIP)
transactions on or after February 01, 2008, if each installment of value
greater than or equal to Rs. 50,000. Please find the list of personnel who are
required to be KYC compliant:
Joint Holders: Joint holders (including first, second and third,
if any) are required to be individually KYC compliant before they can invest
with any Mutual Fund for e.g. in case of three joint holders, all holders need
to be KYC compliant and copies of each holder’s KYC Acknowledgement must be
attached to the investment application form with any Mutual Fund.
Minors: In case of investments in respect of a Minor, the
Guardian should be KYC compliant and attach their KYC Acknowledgement while
investing in the name of the Minor. The Minor, upon attaining adulthood, should
immediately apply for KYC compliance in his/her own capacity and intimate the
concerned Mutual Fund(s), in order to be able to transact further in his/her
own capacity.
Power of Attorney (PoA) Holder: Investors desirous of investing
through a PoA must note that the KYC compliance requirements are mandatory for
both the PoA issuer (i.e. Investor) and the Attorney (i.e. the holder of PoA),
both of whom should be KYC compliant in their independent capacity and attach
their respective KYC Acknowledgements while investing.
Financiers will have to be KYC compliant at the time of Lien
Marking.
For transmission (in case of death of the unit holder): If the
deceased is the sole applicant, the claimant should submit his/her KYC
Acknowledgement along with the other relevant documents to effect the
transmission in his/her favour.
Back to top
How
does the investor transact in a Mutual Fund after completing the KYC process?
Investors must attach their KYC Acknowledgement along with the
Investment Application Form(s)/Transaction Slip(s) while investing for the
first time in every folio. Applications Forms/Transaction Slips not accompanied
by KYC Acknowledgement are liable to be rejected by the Mutual Funds. If you do
not obtain a KYC Acknowledgement, you will not be able to invest Rs. 50,000 or
more in a Mutual Fund.
Back to top
In
case of existing investors when and how will the KYC norms be introduced?
KYC norms are applicable to all investors. It is in the interest
of all Investors to obtain KYC Acknowledgement and submit it to the Mutual Fund
to avoid any inconvenience in future.
Back to top
Once
an account is opened with a Mutual Fund by 1st, 2nd and 3rd holder by
completing the necessary formalities, does the investor need to furnish the
necessary documents again?
Investors must attach their KYC Acknowledgement along with the
Investment Application Form(s)/ Transaction Slip(s) while investing for the
first time in every folio.
Back to top
What
are the consequences of KYC cancellation/rejection?
In the event of any KYC Application Form being found deficient
in terms of information / insufficiency of mandatory documentation, further
investments will not be permitted.
Back to top
Does
the KYC Acknowledgement have an expiry date?
No. Once the KYC Acknowledgement is obtained and informed to a
Mutual Fund, it will be registered against the folio and quoted in all future
account statements. The same will exist in perpetuity, unless cancelled by CVL.
Back to top
What
happens if I have multiple folios/ accounts with a Mutual Fund?
You can inform the Mutual Fund house to update the KYC Acknowledgement against
all the folios/accounts you have with them. However, each of the holders in
these folios/accounts should be KYC Compliant.
Back to top
Is
there a charge I need to pay to get myself KYC Compliant?
Currently KYC is being done free of cost.
Back to top
I
am an NRI residing outside India. How do I get myself KYC Compliant?
The soft copy of these KYC forms will be made available on the
website of all Mutual Funds, AMFI and Central Depository Services (India)
Limited (CDSL). You may also approach your distributor for a form. The same
duly completed along with the necessary attested documents can be submitted at
the PoS or mailed to your representative or Distributor who can complete the
KYC formalities for you.
Back to top
Are
there any special requirements for an NRI?
Yes. In addition to the certified true copy of the passport,
certified true copy of the overseas address and permanent address will also be
required. If any of the documents (including attestations/ certifications)
towards proof of identity or address is in a foreign language, they have to be
translated to English for submission. The documents can be attested, by the
Consulate office or overseas branches of scheduled commercial banks registered
in India
Back to top
Is
there any special requirement for a PIO (Person of Indian Origin)?
The requirements applicable to an NRI will also apply to a PIO.
However, additionally, he will need to submit a certified true copy of the PIO
Card.
Back to top
What
about a Minor attaining adulthood?
Upon a Minor attaining adulthood (i.e. on completing 18 years of
age), he/she must be KYC Compliant and have KYC Acknowledgement of their own.
The same should be informed to the Mutual Fund where he/she holds an
investment, along with other details such as the Bank Details, Signature, etc.
as per the present requirements of such Mutual Fund.
Back to top
Whom
do I inform about change of Name/Address/Status/Signature etc?
You should intimate your change of Name/Address/Status/Signature
etc. to any convenient PoS. You need to quote/submit a copy of your KYC
Acknowledgement and proof (in case of new address). You should provide for at
least 7 days for the change of address to take effect with all the Mutual Funds
with whom you are invested. Please note that you should not write to the Mutual
Fund or its Registrar for the change of address (unless as a designated PoS).
The specified form can be obtained from the AMFI/Mutual Fund website. All
details of the holders in the Mutual Fund records will be replaced by the
address details available in the CVL record.
Back to top
I
am already providing my PAN/PAN Proof for my investment in Mutual Funds. Is
that not sufficient for meeting the requirement of KYC?
The requirement of providing your PAN along with proof is sufficient for proof
of identity. However, the current requirement for KYC requires the Mutual Fund
to verify identity, address as well as obtain further information about the
investor.
Back to top
Why
do I need to give my income details? How can I be sure that it will not be
misused?
As per PMLA, it is mandatory for Mutual Funds to obtain financial status
details from its investors. It is for this reason that the income details are
sought. Please note that no proof/income documents are required. The
information given you in the KYC Application form will be treated in a
confidential manner and used only for regulatory purposes, if called for.
Back to top
Do
I need to inform about my change of Income status?
Yes. If there is an increase/decrease in your income, which
would effectively change the income bracket that you have declared in the KYC
Application form, you should apply to any convenient PoS in the specified form.
No proof is required.
Back to top
Can
an investor give a COA (Change of Address) along with redemption request?
The redemption transaction accompanied by a KYC Acknowledgement form is likely
to be processed without effecting the change of address request. The Registrar
and Transfer Agent of your Mutual Fund will send you a letter advising you to
approach CVL for COA.
Back to top
Is
the KYC Acknowledgement a separate form or is it a part of the Mutual Fund
application? Which of the forms require being time-stamped?
KYC Acknowledgement is a separate form and not a part of the
Mutual Fund application form. Time stamping is not required on the KYC
Acknowledgement.
Back to top
What
do I do once I have received my KYC Acknowledgement?
Once the investor is KYC compliant, he/she will require to
intimate his/her KYC details to all the Mutual Funds with whom it has
investments. The same will be updated in the records of the Mutual Funds.
Back to top
For
signature difference in investor request, Mutual Funds generally ask for a
banker attestation. Since a signature is not available with identity proof,
will you still insist on banker attestation for signature difference?
Signature verification is done by Mutual Funds to protect an
investor from losses. As such, Mutual Funds may follow extra due-diligence if
signatures are not matching, such as getting Bank attestation for such
transactions. This could be independent of the KYC procedure.
Back to top
What
if I have already completed the earlier KYC (MIN) procedure with CVL?
Scenario 1
If the KYC (MIN) was completed by submitting the PAN, the Acknowledgement
obtained at that time can be enclosed along with the Investment Application
Form(s)/Transaction Slip(s) while investing for the first time in every folio
as the PAN number will be stated on the said acknowledgement. You need not
repeat the process now.
Scenario 2
If the KYC (MIN) was completed without submitting the PAN but with other proof
of identity documents, for such cases, CVL will send out a communication to the
respective investors requesting them to submit self-attested copy of PAN card
for KYC compliance.
Back to top
|