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AMFI said that the KYC of 3% mutual fund investors have been put ‘on hold’ by KYC registration agencies (KRAs).
A rough estimates shows that 13.50 lakh investors could be facing disruption in transaction due to the KYC issue. As on March 2024, the MF industry had 4.45 crore investors.
Venkat Chalasani, CEO, AMFI said, “With regards to the KYC norms with effect from April 2024, the mutual fund industry is addressing concerns for a smooth process. Together with AMCs, distributors and other stake holders, we are committed to facilitating a seamless KYC validation process for all, thereby ensuring the integrity and accessibility of mutual fund investments across the board."
According to the SEBI norms, KRAs have validated all KYC details of capital market investors. As part of this activity, KRAs have identified investors based on officially valid document (OVD) like Aadhaar, passport, driving license, voter ID and so on. KRAs also validated email id and mobile number before putting a validation tag on KYC status.
As a result, KRAs have assigned three statuses to KYC - Validated, Registered and On Hold.
Investors with validated tag will not have any problem in executing financial or non-financial transactions.
While investors with ‘registered’ tag will have to submit KYC documents again when they want to invest in new security or new mutual fund, investors with ‘on hold’ KYC status will have to revisit their KYC completely.
