What is the KYC process for investment in Mutual Funds?
KYC is the abbreviation for "Know Your Customer". It is a mandatory process to verify a customer while opening any account. When it comes to mutual funds, the KYC process identifies and verifies the contact details of the individual investors with relevant documents such as a PAN card and address proof like Aadhar Card, Driving License, Voter ID, etc.
Keep reading to understand the entire KYC process for investment in Mutual Funds.
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Mutual Fund KYC and its importance
You must be KYC compliant if you want to invest in any mutual fund scheme. The Securities and Exchange Board of India (SEBI) has prescribed all the intermediaries and financial institutions certain requirements under the Prevention of Money Laundering Act, 2002 (PMLA) to know and verify every customer.
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According to the set guidelines, authorized intermediaries like brokers and mutual fund houses must perform mandatory due diligence on the investors by collecting their KYC documents, in-person verification, photograph, etc. A PAN card is a compulsory document. Investors who fail to provide their PAN number won't be able to complete the KYC process. Hence, they won't be eligible to make any investments. In other words, new investments can only be made by completing the KYC procedure, be it purchasing a mutual fund, starting an SIP or investing a lump-sum amount.
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The non-completion of KYC and PAN details will result in numerous restrictions in future transactions, including redemption, withdrawal, switches, and so on.
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Mutual Fund KYC Process
You can get your mutual funds KYC done in two ways: Offline and Online. Let's discuss both methods.
- There are two ways to get your KYC done:
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1. KRA (KYC Registration Agency):
The authorized body for conducting the KYC process is named CSDL Ventures Ltd.
- Download & print the KYC form available on the CSDL website.
- Fill out the form and attach copies of the required documents like PAN card, address proof, photographs, etc. Ensure that your documents are self-attested.
- Visit the KRA office and submit the KYC application form along with the documents.
Following are the steps to complete your KYC process offline with KRA:
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Intermediaries:
If you're planning to invest through any investment platform or fund house, you will be provided with a KYC form if you still need to register. Once you fill out and submit this form, the process will be complete. The intermediaries are already registered with KRA.
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Online KYC for Mutual Funds
The online process also includes two ways to process mutual funds KYC-
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1. Online Mutual Fund KYC Check with KRA
In the online process, the KYC must be done individually with any intermediary platform or fund house.
The process is similar to the offline process. The only difference is that you don't have to visit offices to submit the documents. You can easily get everything done online.
Below are the steps you need to follow:
- Visit the website of any KRA.
- Create your account and fill out the online form by entering the correct details.
- You'll be asked to provide your valid phone number, PAN card, and other details.
- Upload self-attested copies of all the required documents.
- Once done, you'll be provided with a KYC identification number, which you can share with any mutual fund house or intermediary you plan to invest with.
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2. Aadhar Card KYC
While the Aadhar card is not compulsory for KYC anymore, many investors prefer going this way as it is more straightforward. Many investment platforms and fund houses also offer Aadhar-based KYC systems.
Conclusion
KYC is an important process that every investor has to go through before participating in transactions with any financial institution. We have discussed all the details you need to know about Mutual fund KYC. We hope it helps!
“Visit here https://licmf.info/KYCredressal to learn more about KYC requirements, SEBI Registered Mutual Funds and Grievance redressal.”
Disclaimer: The views expressed herein are based on internal data, publicly available information and other sources believed to be reliable. Any calculations made are approximations, meant as guidelines only, which you must confirm before relying on them. The information contained in this document is for general purposes only. The document is given in summary form and does not purport to be complete. The document does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this document. The information / data herein alone are not sufficient and should not be used for the development or implementation of an investment strategy. The statements contained herein are based on our current views and involve known and unknown risk and uncertainties that could cause actual results, performance, or event to differ materially from those expressed or implied in such statements. Past performance may or may not be sustained in the future. LIC Mutual Fund Asset Management Ltd. / LIC Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investment made in the scheme(s). Neither LIC Mutual Fund Asset Management Ltd. and LIC Mutual Fund (the fund) nor any person connected with them, accepts any liability arising from the use of this document. The recipients before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible / liable for any decision taken on the basis of information contained herein.
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