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KYC mandatory for all MF investments from 2011

KYC formalities are required to be completed for all the investors for any investment in mutual funds, irrespective of the amount, effective from January 1, 2011.

January 07, 2011 / 11:47 AM IST

Mutual Fund (MF) investors will have to complete their Know-Your-Customer (KYC) formalities for all purchases, switch transacitons and new systematic investment / transfer plan registrations from January 1, 2011, irrespective of the amount they invest. The applications received for the aforesaid transactions without complying with KYC procedure are liable to be rejected. However, the said procedure is not applicable for redemption/ repurchase.
 
The category of investors who need to comply with the KYC norms also include power of attorney (PoA) holders (for investments done through a PoA), each of the applicants in case of investments in joint names and guardian for investments made on behalf of minors.
 
Earlier, retail investors were not required to go through KYC procedures for investments up to Rs 50,000.
 
Investors have to submit the KYC form, which is available with fund houses, along with necessary documents at the nearest investor services centre. They have to provide a photocopy of the PAN card , proof of address document and a passport size photograph.
 
Investors have to provide the relevant documents and information ONLY ONCE for complying with KYC. After that Investors could invest in the schemes of all mutual funds by merely attaching a copy of the KYC acknowledgement slip with the application form / transaction slip when investing for the first time in every folio (Post KYC) in each Mutual Fund house, without the necessity to submit the KYC documents again.
 
The KYC norms are one of the measures to prevent investment products from becoming money laundering channels. CDSL Ventures Ltd, a unit of CDSL, will be processing the KYC norms.


 

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first published: Jan 3, 2011 11:42 am

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