KYC verified investors: Investors have to complete their KYC for Investment in mutual funds. All Investors need to complete their KYC to appear as ‘verified’ with the KYC registration agency alongside applications, AMFI is also slated to circulate a form showing intent to invest in mutual funds
As per AMFI new regulation, the old practice of accepting application forms and cheques along-side KYC forms will no longer applicable- said the head of operations at a mid-sized mutual fund. Investors will have to first complete their KYC and their status will have to appear as ‘verified’ with the KRA (KYC Registration Agency) such as CVL or CAMS.
A large number of investors had placed in mutual funds without completing their KYC requirements. “Something as basic as PAN card not properly scanned would invite KYC rejection from KRA. Such investors would have ‘KYC’ under process against their name,” said the operations head of a mid-sized mutual fund who did not wish to be named. “However since the money had already been taken from the investor, he would get units in the fund and would be able to transact just like a KYC verified investor,” he added.
“As per an AMFI circular, such irregular KYC investors will neither be able to make fresh investments nor redemptions or switches in their mutual fund investment without first completing KYC. Similarly, fresh investors would also have to complete KYC and get verified status before investing,” said the marketing head at a relatively new fund house on condition of anonymity. “Some of the older fund houses have a large number of investors with irregular KYC,” he added. Alongside applications, AMFI is also slated to circulate a form showing intent to invest in mutual funds. This form will be taken in place of an application form and cheque at the time of doing KYC.
