SEBI has asked fund houses and mutual fund distributors to get registered with KYC user agencies (KUAs) to do Aadhaar based eKYC of their clients.
With this, AMCs and distributors will be required to become sub-KUA with any of the eight KUAs – BSE, NSE, CDSL India, CDSL Ventures, NSDL Database, NSE Data and Analytics, CAMS Investor Services and Computer Age Management Services.
SEBI said, “The SEBI registered intermediaries / mutual fund distributors, who want to undertake Aadhaar authentication services through KUAs, shall enter into an agreement with KUA and get themselves registered with UIDAI as sub-KUAs. The agreement in this regard shall be as prescribed by UIDAI. Further, the KUAs and their Sub-KuAs shall follow the process as detailed in SEBI circular dated Nov 05, 2019 and as may be prescribed by UIDAI from time to time.”
Earlier, many fund houses used to offer Aadhaar based eKYC. However, most of them have discontinued Aadhaar based eKYC due to stringent norms by UIDAI to become KUA and sub-KUA.
Currently, many fund houses offer virtual IPV based video KYC to on board new clients due to two primary reasons – no limit on investments and easy norms prescribed by SEBI. In fact, two weeks back, SEBI has asked fund houses to ensure that they are ready with necessary infrastructure to verify KYC documents online and facilitate video in person verification.
Experts believe that distributors should rely on virtual IPV through video KYC service offered by AMCs to do KYC of their clients instead of Aadhar based eKYC. Almost all large AMCs offer these services to distributors. In fact, you can tie up with CAMS or Karvy Fintech directly to offer video KYC services.
In a video KYC, you need to upload KYC documents of your clients such as photograph, PAN card, address proof and a cancelled cheque on AMC/RTA website. After uploading these documents, investors need to start real-time video recording using the front camera on their smartphone or the computer’s webcam and display the hard copies of all the required documents. Now, to complete the process, investors have to say ‘Hi’ and in some cases their date of birth during the video recording. If this verification fails, most video KYC facilitators will call your clients to do it manually through skype.
