Mutual Fund KYC Process and Recent Guidelines

• What is KYC?

KYC (Know Your Customer) is a term that is commonly used for the Client/Customer identification process. SEBI has prescribed certain requirements regarding KYC norms for Financial Institutions and Financial Intermediaries including Mutual Fund houses to know their clients. This would be in the form of verification of identity, address, financial status, occupation and other personal information. An applicant must be KYC compliant while investing with any SEBI registered Mutual Fund.

Basis the recent SEBI regulatory guideline, Mutual Fund investors are required to adhere to Re-KYC guidelines w.e.f. Apr 01, 2024. The guideline states that Mutual Fund investors whose KYC documents do not match with the Officially Valid Documents (OVD) need to update them by Mar 31, 2024, failing which, the KYC status will be treated as invalid.

So, it has become important for Mutual Fund investors to check their KYC status and understand its meaning to invest in any Mutual Fund schemes seamlessly and easily.

Meaning of different types of KYC statuses for Mutual Funds

The old rules allowed a KYC-compliant investor to seamlessly invest in Mutual Fund schemes of any of the Mutual Fund houses. However, the new rules allow only those investors who meet certain criteria to make such investments.

1. KYC Validated

• Investors who completed KYC using Aadhaar-based authentication (via DigiLocker or Aadhaar QR Code) fall under this category

• These investors have no restrictions and can invest in any Mutual Fund.

2. KYC Registered

• Investors who completed KYC using a Driving License, Passport or Voter ID instead of Aadhaar fall under this category

• They can only invest in or redeem from their existing Mutual Funds but cannot invest in a new Mutual Fund

• To move to the Validated status, they must redo their KYC using Aadhaar.

3. KYC on Hold

• Investors who have not linked their Aadhaar and PAN or have incomplete KYC details fall into this category

• These investors cannot invest in any Mutual Fund until their KYC is updated

• SEBI has now allowed such investors to redeem their existing investments based on due diligence by fund houses

• To move to a Registered or Validated status, they need to complete the KYC process using Aadhaar.

KYC status can be checked from the following platforms:

• CDSL Ventures Ltd. CVL – Click here

• NSE (DotEx International) - Click here

• NSDL Database Management Ltd (NDML) - Click here

• CAMS - Click here

• Karvy - Click here

How to update Mutual Fund KYC:

There are 2 ways to do so:

Digital Process:

You can complete KYC through ICICI Bank digitally. The eKYC process allows new investors to complete their KYC digitally using Aadhaar OTP authentication easily.

Existing investors can modify the KYC status from ‘Registered’ to ‘Validated’ through the iMobile app. This digital KYC process is available on the iMobile app, integrated with CAMS (Computer Age Management Services).

1. Here’s how non-KYC compliant customer/investors can complete eKYC through iMobile:

• Log in to the iMobile app

• Go to the ‘Invest’ tab and select ‘Mutual Fund’

• If you haven’t done KYC yet, you’ll see the ‘Complete MF KYC’ option

• Click on it and you’ll be redirected to the CAMS website

• Log in to DigiLocker and complete your KYC.

During this process, your Aadhaar and PAN will be validated. An OTP will be sent to your registered mobile number and e-mail by CAMS for verification. Once verified, your KYC will be completed in 3-4 working days.

2. Here’s how existing customers/investors can validate KRA KYC status through iMobile:

• Login to the iMobile app

• Go to the ‘Invest’ tab and select ‘Mutual Fund’

• Click on the Menu at the top left corner

• Select ‘Check Mutual Fund KYC Status’

• It will be redirected to the CAMS website

• Log in to DigiLocker and validate your Mutual Fund KYC.

Your KYC status will change from ‘Registered’ to ‘Validated’ in 4-5 working days.

Or

Visit the below RTA link to complete MF KYC digitally

https://mfs.kfintech.com/Investor/General/ValidateKYC/

https://digital.camsonline.com/kycmodification

Physical Process:

If a customer is unable to process Mutual Fund KYC digitally, they can visit any ICICI Bank branch to complete the physical process by carrying valid original documents (PAN & Aadhaar).

• Download and fill the Form – Obtain the Uniform KYC application form from a KYC Registration Agency (KRA) and complete it with the required details.

  For Individuals: Click here

  For non-individuals: Click here

• In-Person Verification (IPV) – IPV must be conducted by an AMFI/NISM*-certified employee of a Bank or an AMC/RTA** along with verified original documents.

• Submit documents – The completed application, along with required documents (PAN, Aadhaar etc.) must be submitted to an ICICI Bank branch and further submitted to a SEBI-registered intermediary like a Mutual Fund AMC or KRA office.

• Processing and confirmation – If documents are submitted at an ICICI Bank branch or AMC, they need to be further submitted to the KRA, which verifies the details and confirms KYC completion within 10 days.

*AMFI – Association of Mutual Funds in India/NISM – National Institute of Securities Markets

**AMC – Asset Management Company/RTA – Registrar and Transfer Agents