SEBI has made it mandatory for intermediaries to carry out in-person verification of all new investors.
Mumbai: Mutual fund distributors have some reason to cheer as the new, common KYC process for all SEBI registered entities — mutual funds, portfolio managers, depository participants, stock brokers, venture capital funds, and collective investment schemes — comes in to effect from January 1, 2012. Now, it is mandatory for intermediaries to carry out in-person verification (IPV) of its new investors.
Investors need not have to undergothe KYC process again if they are KYC compliant with any of the above mentioned SEBI registered entities. However, fund houses can demand a fresh KYC of the investor, if required. Fund houses can also undertake enhanced KYC process depending on the risk profile of investors.
Fund houses will upload the details of the investors on the system of the KYC Registration Agency (KRA). Registrar&Transfer Agents (RTAs) are also allowed to undertake KYC.
AMCs can rely upon the IPV carried out by any SEBI registered intermediary. KYD compliant distributors can also undertake the IPV for mutual fund investors. It is not known for how long the new KYC will be valid.
Existing KYC compliant mutual fund investors can continue to invest as per the current practice. However, SEBI has urged existing investors to complete IPV, though it is not mandatory. KRA will send a confirmation letter to the investor about the receipt of the initial/updated KYC documents by the fund house within 10 working days. Distributors can download the new KYC forms from AMC websites.
Irrespective of investment size, SEBI has made it mandatory for all mutual fund investors to be KYC compliant from the first day of 2011.
