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MFDs have been experiencing hard time especially with regard to joint MF folios ever since AMFI has made it compulsory for investors to update their PAN and PAN Exempt KYC Reference Number (PEKRN) in MF folios by March 31, 2023.
Last month, AMFI said that non-compliant folios will be frozen i.e. investors cannot make transaction or redeem their money from MF account if they don’t update their PAN and PEKRN details.
While there is no difficulty in the PAN updating process of folios with one holder, many MFDs have been facing a lot of issues with folios having multiple investors due to host of practical problems.
Mumbai MFD Ritesh Sheth of Tejas Consultancy told Cafemutual that one of his clients has received a communication to update PAN in joint holding. This client invested in mutual funds when MF investors were allowed to invest in joint holding even without having a relationship. In this case, two colleagues invested their money in mutual funds. Now, this 80-year-old investor is finding it difficult to find his colleague who has a joint holding in his two MF folios having Rs.47 lakh collectively. The first client doesn’t even know if his friend or the second holder is alive.
Another Navi Mumbai MFD requesting anonymity said that one of his clients invested with his spouse who is no longer alive. Her spouse did not have PAN.
There are other MFDs who have been facing similar issues. Cafemutual spoke to experts to understand how can MFDs help their clients resolve this issue. Let us look at it:
When PAN cannot be updated due to death of second holder
You will have to transfer assets to surviving joint holder. Here is the step by step process:
- Request form T2 is required to transfer units to the surviving unitholder
- Original death certificate or photocopy attested by notary public or gazette officer
- Copy of PAN card of the surviving joint holder (if PAN is not provided)
- Cancelled cheque of the new first unitholder with his name printed on it or recent bank statement
- KYC Acknowledgment
When joint holder is alive and PAN is not available?
In this case, investors will have to seek exemption from AMCs provided PAN of primary holder is available. They can visit AMC and make their case. It is up to AMC to honour your request.
A senior official said that while the industry would freeze the non-complaint folios, the industry will review the situation where non-compliance is due to practical issues.
