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SEBI will soon simplify the onboarding of NRIs in mutual funds and other capital market products.
SEBI Chairperson Madhabi Puri Buch not only acknowledged that NRI onboarding is a major challenge for the capital market industry including mutual funds, she said that the market regulator is actively working with industry participants to resolve this issue and simplify existing KYC norms for NRIs.
The chairperson was answering a question raised by Cafemutual at the launch of NSE’s passives website in Mumbai.
Buch said that the market regulator has given 12 months extension to the industry by exempting NRIs having KYC ‘Registered’ status from doing re-KYC till April 30, 2025.
The SEBI chairperson said that the market regulator has done its bit, now, it is up to the industry to fix this issue with reasonable solution within the given timeline. She said that the industry cannot come to the regulator in the 11th month seeking more relaxation. Instead, the industry through AMFI should proactively come forward with suggestions to simply the existing KYC process to onboard NRI clients.
Currently, NRIs having KYC ‘Registered’ status are being treated like KYC ‘Validated’ status till April 30, 2025.
NRIs where KYC was ‘On hold’ due to non-validation of both email id and phone number or inoperative PAN due to Aadhaar PAN linking issue will also get KYC ‘Registered’ status. However, either of email id or mobile number has to be validated to get the ‘Registered’ status.
For new NRI clients, they must obtain Aadhaar and their Aadhaar has to be linked to Indian phone number to carry out online KYC.
NRIs who do not have Aadhaar can continue to do physical KYC with their physical presence in India.
NRIs account for 4% of the total MF AUM. As on April 2024, the NRIs contributed AUM of Rs. 2.40 lakh crore.
