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Mutual Fund KYC Process and Recent Guidelines
Mutual Fund investors must be KYC compliant to execute financial transactions in Mutual Fund folios.
KYC (‘Know Your Client/Customer’) is a term commonly used for the Client/Customer Identification Process. SEBI has prescribed certain requirements regarding KYC norms for Financial Institutions and Financial Intermediaries including Mutual Fund houses, to 'Know' their clients.
This would be done through verification of identity, address, information regarding financial status, occupation and such other profile related information. Applicants must be KYC compliant while investing with any SEBI registered Mutual Fund.
W.e.f January 2012, SEBI has set out revised KYC norms to make the process uniform across the Securities Market and introduced a common KYC application form for all the SEBI registered intermediaries like Mutual Fund houses, Portfolio Managers, Depository Participants, Stockbrokers, Venture Capital Funds, Collective Investment Schemes etc.
Investors who have not completed the Mutual Fund KYC norms earlier are requested to fill the uniform KYC application form, when investing in Mutual Funds. Once the client/customer has completed the KYC process with a SEBI registered intermediary, he/she need not undergo the same process again with another intermediary.
KYC status can be checked from:
CDSL Ventures Ltd. CVL - https://www.cvlkra.com/
NSE (DotEx International) - https://www.nsekra.com/
NSDL Database Management Ltd (NDML) - https://kra.ndml.in/
Karvy - https://www.karvykra.com/
What is the process involved?
Physical Process
Investors who are not currently KYC compliant have to apply using the Uniform KYC application form at the time of investment.
Step 1: Forms can be downloaded from any KRA (KYC Registration Agency) website and is to be filled with necessary the documentation. Download the form:
For Individuals: Click here.
For non-individuals: Click here.
Step 2: In-person verification (IPV) must be done on the Common KYC application form by the AMC (Asset Management Company)/RTA (Registrar and Transfer Agent) on behalf of AMCs) or an NISM (National Institute of Securities Markets)/AMFI (Association of Mutual Funds in India) certified employee.
Step 3: The application with completed IPV (In-Person Verification) must be submitted along with the required documents to any SEBI registered intermediary including Mutual Fund AMCs or KRA offices.
Step 4: Documents will be forwarded by the intermediary to the KYC Registration Agency (KRA). In case of Mutual Funds, RTA will forward the documents to the KRA on behalf of the Mutual Fund house.
The KRA will then send a communication to the investor within 10 days, confirming the details.
Initial KYC is sufficient to start investing, while the KRA completes the remaining process. (KYC acknowledgement should be attached along with the application form).
Intimation about success of Common KYC can be given to other Mutual Fund houses, either before or at the time of next investment.
Digital Process
EKYC using OTP based Aadhaar verification
The latest eKYC solution enables new investors to complete the KYC process digitally, using OTP based Aadhaar authentication, without any hassles.
This digital process is enabled on the iMobile app by integrating CAMS (Computer Age Management Services). Investors must log in to the iMobile app > Invest & Insure > Mutual Fund Tab > Complete risk profiling.
All non-KYC compliant customers/investors can view the tab for completing eKYC on iMobile. Click on ‘Complete MF KYC’ > you will be redirected to CAMS website > Log in to Digi locker and complete the KYC
The above process involves Aadhaar & PAN validation, where an OTP is sent by CAMS to the registered mobile number & e-mail ID.
Modifications in KYC - Online
Basis the recent SEBI regulatory guideline, Mutual Fund investors must adhere to Re-KYC guidelines w.e.f April 1,2024. This guideline states that Mutual Fund investors whose KYC documents do not match with the Officially Valid Documents (OVD), need to update them by 31st Mar'2024, failing which, KYC will be treated as invalid. Based on guidelines, the below matrix can be referred to, before investing in Mutual Funds.
KYC Status |
When |
Impact on MF Investments |
Required to do Re- KYC |
KYC Validated |
Original KYC was based on Aadhaar |
Can perform MF transactions across fund houses |
No |
KYC Registered |
Original KYC was based on OVD, except Aadhaar |
No impact on existing investments, but can't invest with new a fund house, apart from the one already invested with. |
Yes, to invest in a new fund house apart from the existing one. |
On Hold |
Original KYC was based on non-OVD |
Debarred from all MF transactions |
Yes |
Rejected |
After KYC has been ‘On hold’ for 10-15 days, status will be changed to ‘rejected’ |
Debarred from all MF transactions |
Yes |
Investors can update/modify details in their existing KYC records online. This facility is available only for investors who are Resident Individuals.
KYC modification is allowed only where the current KYC status of the investor is either Registered/On Hold/Validated. Such investors can modify KYC status by visiting the RTA links below:
https://mfs.kfintech.com/Investor/General/ValidateKYC/
https://digital.camsonline.com/kycmodification
What is KYC?
From when is it mandatory for an investor to be KYC compliant?
Which type of transactions is KYC applicable for?
Fresh Purchases
Additional Purchases
Switch Transactions
New Systematic Investment Plan (SIP)
New Systematic Transfer Plan (STP) Registrations
Redemption
Why is Mutual Fund KYC required?
Who must be KYC compliant for MF investments?
What if I have multiple folios with a Mutual Fund?
How can investments be made in the name of a Minor?
What should be done when a Minor becomes a Major?
KYC ('Know Your Client/Customer') is a term that is commonly used for the Client/Customer Identification Process. SEBI has prescribed certain requirements regarding KYC norms for Financial Institutions and Financial Intermediaries including Mutual Fund houses to 'know' their clients. This would be in the form of verification of identity, address, financial status, occupation and other personal information. An applicant must be KYC compliant while investing with any SEBI registered Mutual Fund.
With effect from January1, 2012, all investors irrespective of the number of investments in Mutual Funds, are required to comply with KYC norms to carry out Mutual Fund transactions.
The KYC process is mandatory for all investors as per SEBI guidelines. KYC is being centralised through KYC Registration Agencies (KRAs) registered with SEBI. With this, each investor must undergo the KYC process only once and the details would be shared with other intermediaries by the KRAs.
Currently, all investors (Individuals & Non-Individuals) who wish to make an investment, must be KYC compliant. KYC is also required for transmission of MFs, in case of the Unit holder’s demise.
You must update the KYC acknowledgement against all the folios . However, each of the holders in these folios should be KYC compliant.
The Parent/Legal Guardian who opens the account for the minor must complete the KYC process.
When a minor becomes a major, he/she must undergo and complete the KYC process in his/her own capacity and notify the concerned Mutual Fund houses/Financial Intermediaries by filling up the ‘Minor Attaining Majority’ form, to transact in their folios/accounts.
Note:
Minimum Transaction Amount: As decided by the Fund House, there is a Minimum Transaction Amount indicated against each scheme which is available on Purchase Menu.
To view Transaction details: Invest Online > Mutual Funds > Reports > Transaction Report/Order Status Report > Generate report basis date
IDCW (Income Distribution cum Capital Withdrawal): You will receive it through a direct credit from the AMC into your savings account within the TAT for MF units to reflect in the customer holdings. The unit holdings will get reflected within 2-4 business days from the date of purchase.
The use of this information is subject to the terms and conditions governing such products and services as specified by ICICI Bank / third party from time to time. The information provided herein is for the general understanding and reference and shall not constitute or be deemed to constitute an advice, invitation, offer or solicitation to sell/purchase any products/services of ICICI Bank or any third party. "ICICI Bank" and "Iman" logos are the trademark and property of ICICI Bank Limited. Misuse of any intellectual property or any other content displayed herein is strictly prohibited.
ICICI Bank is an AMFI Registered Mutual Fund distributor. Mutual Fund investments are subject to market risk. Read all scheme related documents carefully.
