New Mutual Fund KYC Norms

February 08 , 2013

KYC guidelines are part of government's anti money laundering measures. Regulator SEBI had introduced Know Your Customer (KYC) procedures for investments in market securities back in 2005 and this applies for mutual fund investors as well.

As mutual fund investor you have to comply with KYC norms through mutual funds distributors or RTAs that are registered as SEBI intermediaries. However different intermediaries used different formats for KYC forms and documentation. So in 2011 SEBI introduced KYC Registration Agencies (KRAs) in order to bring uniformity to the KYC registration process and also issued new guidelines for KYC registration.

New KYC guidelines

There are two new aspects to mutual fund KYC procedure from 1 January 2012. Firstly all investors need to undergo In Person Verification (IPV). You need to be present in person while applying according to the new KYC norms. Secondly, some additional fields for income and occupation has been added in the KYC application form.

Change in KYC norms-

1. Implication for new investors

If you are a first-time investor in mutual funds use the new KYC form (2012). Documents needed for submission are mentioned in the form. The procedure can be completed either through a mutual fund distributor, mutual fund house or mutual fund registrar like CAMS Investor Service Office or Karvy Investor Service Center at the time of applying for your first mutual fund. KYC is a one-time requirement and once done you can apply in any mutual fund on producing your KYC verified report.

2. Implication for existing investors

If you registered your KYC details prior to 1 January 2012 you need to fill and submit the KYC Change form and complete IPV. Documents for identity proof and address proof are not needed to be submitted newly as long as no change is to be made in them. Your existing SIP or STP would not be affected but in order to make fresh investments you need to complete the new KYC process.

KRAs registered with SEBI

Once your KYC form has been submitted along with supporting documents your details will be verified by authorized officials and records will be maintained by KRAs. So far there are 5 KRAs registered with SEBI- CAMS, Karvy, DotEx, CDSL-CVL and NSDL-NMDL. You can check your KYC status online by providing your PAN number. You just need to provide printout of the report on screen to prove your KYC verification for mutual fund investments.

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