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The coming month will be quite eventful for the Rs.40 lakh crore MF industry.
There are a host of changes that have to be done by March 31, 2023; failure to comply with these norms will cause disruption in your business. Let us look at these changes that can impact your business:
Getting nomination from existing investors
Mutual fund investors will have to compulsorily give a declaration if they opt in or opt out of nomination.
SEBI clarified that all existing folios without nomination will have to opt for nomination or opt out of nomination by March 31, 2023. Non-compliant folios will be frozen for investment and redemption, clarified SEBI. Also, non-compliant investors cannot continue their SIPs as well.
You clients can give such a declaration online by visiting CAMS and KFintech.
Two-factor authentication (2FA)
SEBI implemented two factor authentication for MF redemption. With this, investors need to key in OTP to redeem their money from mutual funds through online mode. The two-factor authentication will also be implemented for subscription of mutual funds. Currently, it is applicable at the time of redemption.
One major requirement to implement these changes is to validate mobile number and email id of investors. This task has to be done by March 31, 2023.
Both CAMS and KFintech have launched their respective self-declaration forms through which MFDs can help their clients update email ID and phone number across all fund houses. Your clients can visit CAMS and KFintech to update their mobile number and email id online.
Updating PAN and PEKRN
It is compulsory for investors to update their PAN and PAN Exempt KYC Reference Number (PEKRN) in MF folios by March 31, 2023.
AMFI clarified that investors with such non-compliant folios cannot execute any financial transaction in mutual funds from April 1, 2023.
You can visit CAMS to update your PAN or PEKRN with MF folios. We could not find KFintech link till the time of filing this story.
Aadhaar Pan linking
It is important to link Aadhaar and PAN as early as possible. The last date to link the two is March 31, 2023.
According to the government, PAN card would become inoperative if people fail to link their Aadhaar and PAN before stipulated period. Since PAN is mandatory in mutual funds, investors’ MF folio may also get inactive if they fail to link the two on time.
Please note that PAN is needed for KYC compliance. KYC is compulsory to invest in stock markets and mutual funds.
Your clients can visit incometaxindiafiling.gov.in. Alternatively, your clients can also visit https://www.utiitsl.com/ OR https://www.egov-nsdl.co.in/ to link their PAN and Aadhaar.
