KYC (Know Your Customer) is crucial for stock market investments, including mutual funds. There have been recent updates to KYC norms for mutual fund investors that you must be aware of. These changes are likely to affect how you invest and manage your transactions. Based on your KYC status— ’Validated’, ‘Verified’, or ‘On-Hold’—you may need to take specific actions to ensure smooth investing.
Let’s see what are these new rules for mutual funds and how you can check your mutual fund KYC status online.
What is KYC Registration?
KYC (Know Your Customer) is a process used by banks, trading platforms and financial companies to check a customer’s identity and background. A KYC Registration Agency (KRA) is a company registered with SEBI that keeps KYC records for investors in the securities market.
- They store KYC records in one place, making it easier for investors to manage their information.
- All SEBI-registered companies can access KYC records, making transactions smoother.
- KRAs use strong security measures to protect your KYC data.
Some well-known KRAs in India include NSE KRA, CVL KRA, and CAMS KRA.
Know the steps to do your KRA KYC online!
New Rules for Mutual Fund KYC 2024
If you’ve invested in mutual funds and are unsure about the new KYC rules that have come into effect, here are a few steps you must follow.
You can check your KRA KYC online via KYC Registration Agencies (KRAs) such as CAMS and Karvy.
Here’s a quick overview of the new KYC rules for mutual funds:
1. Find Out Your KYC Status
The first step is to check your KYC status. You can do this by logging into any KYC Registration Agency (KRA) website or mobile app, such as CAMS, Karvy, CVL, or NDML.
Your KYC status will fall into one of three categories: On-Hold, Validated, or Verified.
Here’s what you should do for your mutual fund KYC process as per the above three categories:
A- KYC Validated
If your status is KYC Validated, you don’t need to do anything further. You can continue with all your transactions as usual.
B- KYC Verified
If your status is KYC Verified, your current investments won’t be affected. However, if you want to make any new investments, you’ll need to resubmit your KYC documents.
If your KYC was done using Aadhaar, you don’t need to repeat the process for new transactions. If your KYC was done with non-Aadhaar documents, you’ll need to verify your mutual fund KYC online again each time you apply for a new scheme.
C- KYC On-Hold
If your status is KYC On-Hold, it means all your financial transactions, including those in existing schemes, are restricted. You cannot make any new transactions until you update your KYC. Wondering how to do mutual fund kyc online?
To complete the mutual fund KYC process, you must submit any officially valid documents (OVDs) like Aadhaar, Passport, or Voter ID at the nearest branch of your Asset Management Company (AMC) or KRA.
Mutual Fund KYC Process For NRIs
The new KYC process is now tougher for Non-Resident Indians (NRIs). NRIs and Overseas Citizens of India (OCIs) with foreign mobile numbers are exempt from Aadhaar-linked OTP verification if their PAN reflects their foreign residential status.
How to do your KYC
To check your KYC status, you must log in to any mutual fund’s website and visit the ‘Modify/Update KYC’ page. Next, you must follow the steps to enter your details and upload the required documents. Once your email ID/mobile number and details are validated by the KRAs, your KYC status will change to Validated.
This means you will be able to continue with your mutual fund transitions and investments as usual.
How to Do KYC Offline
To complete your KYC offline, download the KYC form from any AMC, RTA, or AMFI website. You must fill out the form and submit it along with the required documents, such as PAN and Aadhaar, at any AMC or RTA office.
Conclusion
By following these steps, you can ensure your mutual fund transactions proceed without any issues. With new KYC (Know Your Customer) rules in place for mutual fund investors, it’s important to understand your KYC status. Log on to any KYC Registration Agency and find out your status now.
1️⃣ KYC Validated? No action is needed.
2️⃣ KYC Verified? Resubmit documents for new investments.
3️⃣ KYC On-Hold? Submit the required documents to resume transactions.
FAQs| Mutual Fund New KYC Rules
Mutual fund investors now need to ensure their KYC status is validated or verified to continue transactions. If your status is “On-Hold,” you’ll need to update your documents.
The new rules require investors to check their KYC status and update any incomplete information.
Investors with “On-Hold” KYC status must submit the required documents to resume transactions whereas, if your is KYC Verified, you must resubmit documents for new investments.
No, KYC is mandatory for investing in mutual funds. You need to complete the KYC process to start any investments.
Yes, KYC is required for SIP investments. Without completing KYC, you cannot set up a Systematic Investment Plan (SIP).
If your KYC is not validated, your mutual fund transactions will be restricted, and you’ll need to update your documents.
Source: MoneyControl
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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.