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In a major development, SEBI has asked market intermediaries which include mutual funds, PMS and AIF to allow their investors to invest immediately in their product after completion of KYC process.
This means, once your client submit their KYC documents and complete the KYC process, they can invest their money immediately in mutual funds, PMS and AIFs among other capital market products. There is no need to wait for KYC validation, which usually takes 4-5 days.
With this, MFDs need not wait for KYC to be completed to onboard a new client. This will come into effect from September 1, 2023.
SEBI said, “In the interest of investors and for ease of transacting in securities market, the client shall be allowed to open an account with intermediaries and transact in securities markets as soon as the KYC process is completed.”
Further, SEBI has asked KRAs to verify KYC records within 2 days of receipt of KYC records. KRAs will have to verify PAN, name, address, mobile number and email id.
Also, KRAs will have to facilitate interoperability i.e. there is no need to do multiple KYC times in capital market if an investor has done KYC once.
Another important development is standardisation of KYC process across KRAs. Currently, KRAs have their own set of rules to do KYC.
Further, SEBI has asked to complete KYC verification of all existing investors within 90 days.
