Q What is KYC?
A 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.
Q What are the KYC requirements for a Mutual Fund Investor?
A Individual investors will have to produce his 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 its 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. .
Q Where and how does one get to be KYC Compliant? Does the investor have to repeat the KYC process with every Mutual Fund?
A 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 repects, 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.
Q What is a KYC Application Form?
A A KYC Application Form has 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.
Q Should the investor visit PoS personally to obtain KYC Compliance?
A 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.
Q From what date is it mandatory for an investor to be KYC Compliant?
A With effect from 01 February 2008, any investor investing Rs. 50,000 and above was required to be KYC compliant. However, with effect from January 01, 2011, KYC compliance is mandatory for all categories of investors irrespective of the amount invested.
Q To whom is a KYC applicable? Is there any exemption?
A Currently, all investors (Individuals or Non Individuals) who wish to make an investment, irrespective of any amount will required to be KYC Compliant. Please find the list of personnel who are required to be KYC compliant:
Q To whom is a KYC applicable? Is there any exemption?
A Currently, all investors (Individuals or Non Individuals) who wish to make an investment, irrespective of any amount will required to be KYC Compliant. 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.. 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 majority, 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.
