KYC – A PRE-REQUISITE BEFORE INVESTING IN MUTUAL FUNDS.
Before investing in a mutual fund scheme, whether through online mode or via conventional paper-based mode, one must first complete the KYC process by filling up the prescribed KYC form.
KYC stands for “Know Your Customer” and is a term used for the Customer Identification Process as a part of the account opening process with any financial entity. KYC establishes an investor’s identity & address it through relevant supporting documents such as prescribed photo id. (e.g., Passport, Aadhaar or PAN card) and address proof. KYC compliance is mandatory under the Prevention of Money Laundering Act, 2002, and Rules are framed thereunder.
KYC is an acronym for “Know Your Customer” and is a term used for the Customer Identification Process as a part of the Account Opening process with any financial entity. KYC establishes an investor’s identity & address through relevant supporting documents such as prescribed photo id (e.g., PAN card) and address proof and In-Person Verification (IPV). KYC compliance is mandatory under the Prevention of Money Laundering Act, 2002 and Rules framed thereunder, read with the SEBI Master Circular on Anti Money Laundering (AML) Standards/ Combating the Financing of Terrorism (CFT) /Obligations of Securities Market Intermediaries.
A standard Account Opening form (AOF) is generally divided in 2 parts:
- Part I contains the basic and uniform KYC details of the investor as prescribed by the Central KYC registry (Uniform KYC) to be used by all registered financial intermediaries and
- Part II additional KYC information as may be sought separately by the financial intermediary such as a mutual fund, stock broker, depository participant opening the investor’s account (Additional KYC).
WHAT IS CENTRAL KYC REGISTRY?
Central KYC Registry (CKYCR) is a centralized repository of KYC records of customers in the financial sector through an entity substantially owned and controlled by Central Government to receive, store and safeguard the KYC records of a client in digital form. This is to implement uniform KYC norms and inter-usability of the KYC records across entities in the financial sector with an objective to reduce the burden of producing KYC documents and getting those verified every time when the customer creates a new relationship with a entity.
Government of India has authorised the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), to act as, and to perform the functions of the Central KYC Registry.
You Can check Your Kyc Status here by simply Entering your PAN Number and Captcha..
It is important for an investor to submit their identity details to the mutual fund houses. AMC’s are required to formulate rules and implement a customer identification program in accordance with the Prevention of Money laundering Act, 2002 (PMLA) Regards – Team, MMFS.
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