Skip to main content

KYC norms for MF investments

What is KYC?

Client identification process is known as 'Know Your Customer or Client' aka- KYC. Sebi has made it mandatory for all mutual funds to know their clients. This would be in the form of verification of address and identity, providing financial status, occupation and such other demographic information to CDSL Ventures Limited (CVL), a wholly owned subsidiary of Central Depository Services India Limited. Investments equal to and more than Rs 50,000 in a mutual fund portfolio necessarily have to be accompanied by a KYC acknowledgement letter.

How to get KYC compliant?

CVL is the designated body to carry out the KYC compliance procedure for mutual fund investors. You have to approach CVL through any of the point of service (POS). The KYC application form is available on the CVL website in the downloads section. One can take a printout of the applicable form. The same is also available on mutual fund websites.


   Investors need to attach self-attested photocopy of the PAN card as identity proof, along with the application form. There is a need of self-attested photocopy of an address proof enlisted by CVL. Alternatively, the investors can also attach true copies attested by a notary or a gazetted officer or a manager of a scheduled commercial bank of a multinational foreign bank. Investors need not visit POS in person. The application can be routed through mutual fund distributors or a representative of investors. The original documents are verified at the counter and given back to the applicant or representatives of the applicant.


   Non-resident Indians also need to undertake the same process. They additionally have to provide certified true copy of their overseas address. If the same is in foreign language other than English, the same have to be translated in English for submission. The documents can be attested by consulate office or overseas branches of scheduled commercial banks registered in India.


   POS upon verification of the documents and receipt of duly filled-in application form issues an acknowledgement letter free of cost. The letter needs to be duly stamped and signed by representatives of POS. In case of joint holdings in a portfolio, all the joint holders have to get themselves KYC-compliant. Applications where the investments are in joint names, photocopies of KYC acknowledgement letters of all applicants must be attached with the application form. In the case of investments in the name of minors, the KYC acknowledgement letter of the guardian is a must.

What should you do with KYC acknowledgement letter?

Please note that neither POS nor CVL will inform about the KYC exercise you have completed in respect of any of the mutual fund houses. It is your responsibility to do so. You can attach a photocopy of KYC acknowledgement letter, along with the application letter, at the time of fresh investments. You can simply write to the fund houses where you have an investment and request them to update your KYC status. Such requests must be accompanied by the photocopies of the KYC acknowledgement letter. You can also attach the photocopy of KYC acknowledgement letter with your request for additional investments in your mutual fund portfolio.


   A point to note that upon submission of your KYC acknowledgement letter, the mutual fund house will update your status in their books. The address mentioned in your KYC letter will prevail over the address you have mentioned in your original application. All future correspondence by the fund house will be maintained at the address mentioned in the KYC letter.

 


Popular posts from this blog

Mutual Fund Review: Taurus Tax Shield

    Taurus Tax Shield has seen a turnaround in performance since 2007, but still remains a volatile offering… The fund has seen a turnaround in its performance since 2007 and has delivered impressively during market rallies since then. The portfolio is also more diversified. It contained its downfall to an average level in 2008 but is still one of the most volatile offerings in this category. Bold investors can look at this fund.   Strategy The fund manager invests across the market capitalisation and sectors. The selection of stocks is made on the basis of long-term business prospects and value creation. Fund Insight Launched in March 1996, the fund was a laggard with just two annual outperformances. Concentrated stock bets and high exposure to mid and small caps led to it being hit harder during market downturns. The number of stocks in the portfolio never exceeded 20 and it was not rare to see the top 5 holdings account for around 60 per cent of the portfolio. After b...

AXIS Long Term Equity Fund - The Best Tax Saver Fund for 2016

  AXIS Long Term Equity Fund - Invest Online   History:   The open ended mutual fund was launched on December 21 in the year 2009. It is benchmarked against BSE 200 and managed by the fund manager JINESH GOPANI. Initially the scheme was called as Axis tax saver fund but later it was renamed as Axis long term equity fund with effect from September 2, 2011. Nature of investment: As far as asset allocation is concerned, 97.52% of the stocks are equity and 0.02% is debt based. The primary focus of the fund is to invest in diversified equity stocks that have higher growth potential. Total asset size of the fund is in the tune of 4,996 CRORE as of June 30, 2015. Performance: The performance of the fund for one year, 3 years and 5 years are 23.6%, 29.9% and 19.1 respectively which are far greater than 6.4%, 14% and 5.6% benchmark figures. It has also preformed fairly well against SBI magnum Tax Gain (G) and HDFC tax saver (G). The growth comparison is enumerated below;                        ...

Health insurance guide - Part I

Insurance, by definition, is morbid. What if I die suddenly? What if my home caught fire? What if I had to undergo expensive medical treatment? What if something that I thought happened only to others befell me? Insurers, who work with large samples, calculate the probability of such an event and, hence, the possibility of them having to pay out a sum of money to mitigate, to the extent possible, the effects of that disaster. However, the possibility of you undergoing some kind of expensive medical treatment during your lifetime is far more likely than you dying suddenly or your house burning down. Given that costs at private healthcare facilities, where you are most likely to land up, is high, and, doubling every four years 10 months or so, the rest of your money life could easily go out of whack if you had to incur such expenses. Just 12 per cent of India's population is covered with some sort of health insurance. Pared to the bone, for a comparatively small price, health insu...

IDFC Classic Equity Fund

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   IDFC Classic Equity Fund IDFC Classic Equity is a large-cap equity fund which currently has assets under management worth Rs. 158.52 crore. It was launched in August 2005. The fund is benchmarked against the BSE-200 Index. Performance YTD 1-Year 3-Year 5-Year Since Inception IDFC Classic Equity 0.93 26.61 6.30 1.01 11.65 BSE 200 1.52 17.31 6.00 1.99 12.98 All figures in % as on January 31, 2013; Returns above one-year in CAGR terms ...

10 year NSC launched, all set to give 8.7 per cent

Invest in Mutual Funds Online Download Mutual Fund Application Forms THE government introduced a 10-year National Savings Certificate ( NSC ), which will earn an interest rate of 8.7 per cent per annum. The notification for the launch of the new savings instrument, 10-year National Savings Certificate (IX-Issue), 2011, has been issued, an official statement said. The scheme will come into effect from December 1, it added. Investments in NSC will earn interest at the rate of 8.7 per cent compounded semi-annually, it said, adding that on an investment of Rs 100, the depositor will get Rs 234.35 on maturity of the NSC. There is no upper limit for investment in the certificate, it added. The new scheme will give better returns along with tax benefit to savers. At present, the maturity period of NSC is six years and it qualifies for tax relief for investment up to Rs 1,00,000 under Section 80C. The decision to raise the maturity period of NSC has been taken on the b...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now