KYC compliance is mandatory for every person investing in mutual funds under the Prevention of Money Laundering Act, 2002 and Rules framed thereunder, read with the SEBI Master Circular on Anti Money Laundering (AML) Standards/ Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries. Learn more about KYC through the below topics –
- What is CKYC?
- How to check KYC status?
- Why is KYC important?
- What documents are required for KYC?
- Is there a charge I need to pay to get myself KYC verified?
- What does IPV refer to in KYC? Is it mandatory?
- Do existing mutual fund investors, who are KYC compliant, need to do anything?
What is CKYC (Know Your Customer)?
CKYC or Central Know Your Customer, is a term commonly used for Customer Identification Process. SEBI has prescribed compulsory KYC norms for Mutual Funds to ‘know’ their clients before they can start investing. This would be in the form of verification of identity and address, financial status, occupation, and such other demographic information.
With effect from January1, 2012, all categories of investors irrespective of the amount of investments in Mutual Funds are required to comply with KYC before carrying out any transactions in Mutual Funds. Thus any investor investing into mutual funds would be required to be KYC compliant without which the transactions will be rejected by the respective mutual fund houses.
It is a one-time verification process and is valid for transactions across all mutual funds.
How to check KYC status
KYC status can be checked by entering your PAN number from any of the below-mentioned websites –
- CDSL Ventures Ltd. CVL – https://www.cvlkra.com/
- NSE (DotEx International) – https://www.nsekra.com/
- NSDL Database Management Ltd (NDML) – https://kra.ndml.in/
- CAMS – https://camskra.com/Home.aspx
- Karvy – https://www.karvykra.com/
Why is CKYC important?
- Cases of fraud have been around for some time and that’s why it is both important as well as mandatory to maintain all KYC information and upload it on CKYC within three days of the submission of the data by the customer. This document will help in identifying the identity of the customer and would prove as a safeguard against money laundering, terrorism financing and financial frauds.
- CKYC is a centralized process and by having a centralized record, institutions don’t have to go through the process of verification every time an investor makes a fresh investment.
- In case of any changes, one doesn’t have to makes changes in data for different institutions separately. Any update shall be updated in all institutes.
What documents are required for CKYC?
For completing the process of CKYC, the following documents are necessary:
- Completely filled KYC application form (click here to download the same)
- Documents required:
- Self-attested copy of PAN card
- Self-attested copy of Address proof: Latest Telephone Bill/Landline/Mobile /Latest Electricity Bill /Passport copy /Latest Bank Passbook/Bank Account Statement /Latest Demat Account statement /Driving License. /Ration Card /Rent Agreement
• In case of joint applicants, KYC should be completed by all joint applicants.
• In case of applications under Power of attorney, KYC has to be completed by both the investor and the power of attorney holder.
• In case of NRIs/PIOs, they are required to complete KYC.
• In case of minor, the KYC should be completed by the Parent/Guardian signing on behalf of the Minor. However, in the event of such minor person becoming major, the KYC has to be completed on becoming major.
Documents required for Non-individuals Click here to download KYC form for non-individuals
- Partnership firm:
- Copy of balance sheets for the last 2 financial years
- Certificate of Registration
- Authorized signatories list
- Copy of Partnership deed
- Photo, Proof of Identity and address proof, PAN of all the partners/beneficial owners.
- Hindu Undivided family:
- PAN of HUF
- Deed of Declaration of HUF.
- Photo, Proof of Identity and address proof, PAN of all the trustees
- Bank pass-book/ bank statement in the name of HUF
- Copy of balance sheets for the last 2 financial years
- Photo, Proof of Identity and address proof, PAN and DIN numbers of whole time directors/ two directors in charge of day to day operations
- Photo, Proof of Identity and address proof, PAN of individual promoters holding control – either directly or indirectly
- Copy of latest shareholding pattern including list of all those holding control, either directly or indirectly, in the company in terms of SEBI takeover regulations, duly certified by the company secretary/ whole time directors/ two directors/ MD
- Copies of memorandum and articles of association and certificate of incorporation
- Copy of board resolution for investment in securities market
- Authorized signatories list with specimen signatures.
Is there a charge I need to pay to get myself KYC verified?
No. KYC is done free of cost.
What does IPV refer to in KYC? Is it mandatory?
IPV refers to in-person verification that is done by an authorized institution. It is mandatory for the investors to complete the IPV. The entities authorized have to collect and maintain the records of all customers. Only SEBI authorized entity’s IPV will be considered. The following entities are authorized to do IPV:
- KYC registration agency(KRA)
- The AMC
- Mutual fund agent
- Mutual fund distributor
- MF’s registrar
- Transfer agent like CAMS or karvy computer share private limited.
In order to carry out the in-person verification, you can visit any of the above-mentioned entities along with the KYC documents or a person from their office may visit you to complete the KYC procedure. Also, certain AMCs allow video verification via video conferencing. For that, one needs to have a good internet connection and he will have to upload ID proofs like his photograph, address proof, a cancelled cheque, PAN card and signatures of the AMC’s platform. After the submission, you will have to start recording video with you displaying your hard copy of all the documents one by one, each for 10 seconds. On completion of procedure, a 14 digit KIN (KYC identification number) shall be allotted to you, which is different for every individual and can be used across the financial sector as KYC verification for making investments.
Do existing mutual fund investors, who are KYC compliant, need to do anything?
As of now, there’s no such compulsion on them. They can continue investing until further notice.