Mutual fund new KYC rules: Aadhaar is a must if you want to invest in multiple mutual fund schemes smoothly However, the KYC validated can be achieved only if the KYC documents submitted by an individual can be verified with the source issuing such documents
The new KYC rules for mutual fund investors that came into effect on April 1, 2024, state that the investors must be "KYC Validated" to seamlessly invest in any scheme of any mutual fund house. They can continue their existing investments if their status is "KYC Registered" or "KYC Verified". But for fresh investments, they must provide official valid documents (OVD) again for KYC purposes along with the application form.According to the FAQs issued by CAMS (the registrar and transfer agent of mutual funds), "Wherever KYC Registration Agency (KRA) can independently validate the Proof of Address (POA) and Proof of Identity (POI) document with the source data [such as Income Tax Department database on PAN, Aadhaar XML/DigiLocker/m-Aadhaar], and PAN-Aadhaar linking was successful or Not Applicable, Email and/or Mobile is validated, KYC status will be tagged as 'KYC Validated'. In such instances, an investor can transact seamlessly with any other SEBI registered intermediaries without production of KYC documents, provided there is no change in KYC information already available. At present, where Aadhaar is used as OVD for KYC processing, the same can be validated with the source data independently by KRA."
CAMS further adds, "Wherever KRA cannot independently validate the information at their end with the POA/POI document source data but Email and/or Mobile is validated and PAN-Aadhaar linking was successful or Not Applicable, KYC status will be tagged as 'KYC Registered'. In such instances, investor can transact with any other new SEBI registered intermediaries by producing the KYC documents again, even if there is no change in KYC information already available."
Hence, for the KYC status to go from KYC Registered/KYC Verified to KYC Validated, Aadhaar is a must as OVD.
Amol Joshi, Founder, PlanRupee Investment Services, says, "KYC via Aadhaar as an OVD seems to be the only way an investor can achieve 'validated' status in their KYC and be able to invest in new as well as old mutual fund houses without any further KYC documentation."
Type of OVD and KYC status
Type of OVD used
KYC status till March 31, 2024
KYC status from April 1, 2024
Aadhaar
Validated
KYC Validated - Where OVD data is validated with the issuing authority, i.e. UIDAI, PAN-Aadhaar linking done, and email and/or mobile is validated.
Aadhaar (Physical)
Registered
KYC Registered - Where Aadhaar OVD data could not be validated with the issuing authority i.e. UIDAI, PAN-Aadhaar linking seeded, and email and/or mobile is validated.
Non-Aadhaar OVDs (Allowed OVDs)
Registered / Verified
KYC Registered - Where the proof cannot be validated with the issuing authority and email and/or mobile is validated.
Non-Aadhaar OVDs (Allowed OVDs)
Registered
KYC On-Hold - Where the proof cannot be validated with the issuing authority and email and/or mobile is not validated.
Deemed OVDs (other than Allowed OVDs)
Registered
KYC Registered - Where the proof cannot be validated with the issuing authority and email and/or mobile is validated.
Deemed OVDs (Other than Allowed OVDs)
Registered
KYC On-Hold - Where the proof cannot be validated with the issuing authority and email and/or mobile is not validated.
Non-OVDs (other than listed)
Registered
On-Hold
Invalid contact details [Email and / or Mobile] – irrespective of OVDs submitted
Registered
On Hold
Abdulla Chaudhari, Head - Investor Services, Edelweiss Mutual Fund, says, "The ease of investment in any mutual fund scheme of any mutual fund house will depend on two things - residential status of investor and KYC status. Existing investors of AMC (whose status is a resident individual investor) can continue investing with KYC status verified/registered in their existing investments. To invest in AMC where they have never invested before, they need to submit a KYC modification request along with the investment application. Investors with KYC status as validated can invest in any AMC without submitting the KYC modification request with the investment. NRI investors need to submit a KYC modification in all scenarios if their KYC status is not validated. While using Aadhaar for KYC is not mandatory, using it avoids doing multiple modifications with different AMCs."
How mutual fund investors can check KYC status online
To check the KYC status, a mutual fund investor can visit CVLKRA.com to check the status. The KYC status can be checked under the "KYC Inquiry" tab.Also Read: Meaning of different types of KYC status
Mutual fund investors who can do KYC online
If a mutual fund investor wants to get the KYC Validated status, they are required to undergo the re-KYC process. However, there are some mutual fund investors who can redo the KYC process online. Read on to know who can redo the KYC process online and who has to do KYC offline.Documents allowed as OVD for mutual fund KYC
The CAMS FAQs issued an updated list of documents that can be used as OVDs as proof of identity and proof of address.
Document
Proof of Identity
Proof of Address
Passport
Yes
Yes
Driving licence
Yes
Yes
Proof of possession of Aadhaar number
Yes
Yes
Voter ID card
Yes
Yes
Job card issued by NREGA duly signed by state government officer
Yes
Yes
Letter issued by National Population Register containing details of name address
Yes
Yes
Any other document as notified by central government in consultation with regulator
Yes
Yes
This story originally appeared on: India Times - Author:Faqs of Insurances
