Mutual fund re-KYC process effective from April 1, 2024; all you need to know

, ET Online|

May 01, 2024, 03:48:33 PM IST

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Why Re-KYC required and for what type of KYC records?

According to the CAMS website, “As per SEBI Master circular on KYC norms for the securities market clause 6 – The registered intermediaries shall periodically update all documents, data or information of all clients and beneficial owners collected under the CDD (Customer Due Diligence) process. Basis the above requirements, investors have to do re-KYC. In the interest of investor inconvenience, Intermediaries are required to facilitate re-KYC where Deemed OVDs (as listed in A6 above and any other document not as per A1) has been used as of now and KYC status in KRA records are available as “KYC Registered”.

Following are important FAQs on KYC process changes effective from April 01, 2024, according to the CAMS website.

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What will be the impact on financial (FTs) & non-financial transactions (NFTs) effective from April 01, 2024?

New folio creation in the new SRI/MF is subject to KYC status. If the KYC status is Validated, then they can continue seamlessly without submission of any KYC documents, subject to no change in the KYC information already submitted.
If KYC status is other than KYC Validated, investor has to submit the KYC documents again. If the KYC status is On-Hold, as per the current process, both FT & select NFT transactions will be restricted until the KYC status is remediated by submission of modification request with respective KRA through any of the intermediary to become KYC Validated.

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Will there be an impact on the existing investors?

No impact in the existing Fund(s) for any financial transactions including redemption, switches, SIP triggers where such PAN exists in those Funds and KYC status is Validated / Registered. As per the current process, if the KYC status is other than Validated / Registered and not remediated, all financial and non-financial transactions might get impacted.

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Is this applicable for all transaction sources?

Yes. However, for the transactions routed through exchange demat mode and MFU, reliance is made on the KYC status provided by them in their feed and these validations are controlled at their end.

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What is the recourse to remediate such PANs?

Investors must provide a modification request with the valid email and/or mobile number or fresh set of KYC documents as applicable to the respective KRA through any of the intermediary. Refer the matrix in A8. Post successful validation at KRA’s end, the respective KRA will change the status as “Validated” and will send an unsolicited feed to the RTA. Once the same is updated in the RTA records, the investor can transact. Investor should be requested to complete KYC process using Aadhaar as OVD through Online mode and got successfully validated, then there will not be any requirements to do re-KYC and avoid submission of KYC documents to each of the new SRI/MF.

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For HUF investors, what is the supporting documents to be submitted for address proof?

HUF Investors can submit bank statement/bank passbook containing the name of HUF and their address as address proof.

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Mutual fund re-KYC process effective from April 1, 2024; all you need to know

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