Is Your Mutual Fund KYC Status Verified, Registered or Hold?

May 10, 2024 / Reading Time: Approx. 5 mins

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Is Your Mutual Fund KYC Status Verified, Registered or Hold

Know Your Customer or KYC is mandatory to deal in the securities market. If the KYC norms are followed in totality, it saves you, the investor the hassle of transacting in securities, such as mutual funds, stocks, etc.

KYC has been prescribed by the market regulator in accordance with the provisions of the Prevention of Money Laundering Act, 2002 (PMLA) and KRA Regulations 2011.

To comply with KYC, KYC Registration Agencies (KRAs) are set up, such as CDSL Venture Ltd. (CVL) -- a wholly owned subsidiary of the Central Depository Services (India) Limited (CDSL) -- NSDL KRA, NSE KRA, or you could do it via KFintech or CAMs.

Now say, there are changes in your KYC details or you haven't updated the details, a KYC modification and updation process needs to be followed.

Here’s an update: Based on the feedback received from the stakeholders in the securities market and for ease of transacting of investors, the capital market regulator, SEBI, has provided some relief to investors on KYC. We have published a fresh piece on Mutual Fund KYC. To read the good news and know what it means for existing investors in mutual funds, click here.

To ensure uninterrupted experience when transacting in mutual funds, as an investor you must ensure that the name in the mutual fund folio/s and Permanent Account Number (PAN) match. Further, verify your registered mobile number and email ID. Also, the address proof given should be among the Officially Valid Documents (OVD).

It is preferable to use Aadhaar as an OVD. If the Aadhar and PAN are linked and this entire process is followed diligently (with mobile and email ID verified), your KYC status will be "Validated" and not just "Registered".

Note, if Aadhaar is not used for OVD, but the name in the folio/s matches with PAN and the mobile number along with email ID are verified, then the KYC status shall only display as "Registered", which means that you will need to complete your KYC in totality with OVD. Not doing so, will not interrupt transacting with the existing fund house but will be required if you wish to transact with any other, i.e. a new fund house that you do not have exposure to.

Now if only your name in the mutual fund folio/s matches with the PAN, but contact details, i.e. mobile number and email ID aren't verified, plus Aadhaar is not used as an OVD (for linking purposes), then your KYC status would show as "Hold". In such a case, you will not be able to do any further transactions irrespective of whether an existing fund house or a new fund house. It may also disturb your existing SIP and/or STPs. So, you will have to redo your KYC again in totality.

Table: KYC Status and Impact on Your Mutual Fund Transactions

KYC Status Existing Investment in MFs New Investments in MFs Action Required
KYC Validated No Impact No Impact None
KYC Registered No Impact A fresh set of KYC documents needs to be submitted every time to invest in mutual funds Do re-KYC using Aadhaar as OVD for KYC status to show "validated"
KYC Hold Transactions will not be allowed Transactions will not be allowed Do re-KYC: ensure contact details are verified and use Aadhaar as OVD to make sure for KYC status shows "validated"
 

Currently, according to AMFI, around 3% of mutual fund investor accounts show "KYC hold" status. The mutual fund folio counts as of April 30, 2024, is 18,14,68,286.

It is in your interest to check your KYC status by visiting any of the following websites...

- https://www.cvlkra.com

- https://www.camskra.com/

- https://mfs.kfintech.com/investor/

- https://kra.ndml.in/kra-web/jsps/pos/KYCClientInquiry_NEW.jsp

- https://www.nsekra.com/

To validate your contact details in the KYC records, you could use the links below:

- CVL KRA- https://validate.cvlindia.com/CVLKRAVerification_V1/

- CAMS KRA- https://www.camskra.com/PanDetailsUpdate.aspx

- KFintech - https://mfs.kfintech.com/investor/Transact/ChangeFolioEmail

- NSDL KRA- https://kra.ndml.in/ClientInitiatedKYC-webApp/#/ClientinitiatedKYC

Make sure to enter a valid mobile number, email address and PAN. Further, note that PAN and Aadhaar are to be linked. Also, keep your registered mobile number and Aadhaar handy to do Mutual Fund KYC with One Time Password (OTP).

For address verification and validation here is the list of OVDs allowed:

  • Aadhaar

  • Passport

  • Driving License

  • Voter ID

  • Letter issued by National Population Register containing details of name and address

  • Job card issued by NREGA duly signed by an officer of the State Government

To complete the process of validation by using any of the above OVDs, use this link- https://validate.cvlindia.com/CVLKRAVerification_V1/.

Here are a few steps given by AMFI to check your KYC status:

(Source: www.amfiindia.com)
 

Even if there are no changes in the KYC details, it is better to re-do KYC. The new rules set by the capital market regulator are effective April 1, 2024. To ensure that your KYC status shows "Validated", follow the KYC process in its entirety.

Note, that the KYC process can be done online sitting in the comfort of your home, office, or wherever you are in just a few minutes. Having said that, if you find it difficult to do it by yourself, do not hesitate to reach out to your mutual fund distributor or investment advisor.

To save investors from the trouble of doing multiple KYCs for all financial transactions, the work on a single KYC is in the making. This initiative is taken by Finance Minister, Ms. Nirmala Sitharaman to ease compliance responsibilities.

[Read: Common KYC for All Your Financial Investments Soon]

A common KYC system has the potential to revolutionise the landscape of financial inclusion and significantly enhance retail investor participation across various financial products.

Happy Investing!

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ROUNAQ NEROY heads the content activity at PersonalFN and is the Chief Editor of PersonalFN’s newsletter, The Daily Wealth Letter.
As the co-editor of premium services, viz. Investment Ideas Note, the Multi-Asset Corner Report, and the Retire Rich Report; Rounaq brings forth potentially the best investment ideas and opportunities to help investors plan for a happy and blissful financial future.
He has also authored and been the voice of PersonalFN’s e-learning course -- which aims at helping investors become their own financial planners. Besides, he actively contributes to a variety of issues of Money Simplified, PersonalFN’s e-guides in the endeavour and passion to educate investors.
He is a post-graduate in commerce (M. Com), with an MBA in Finance, and a gold medallist in Certificate Programme in Capital Market (from BSE Training Institute in association with JBIMS). Rounaq holds over 18+ years of experience in the financial services industry.


Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. Registration granted by SEBI, Membership of BASL and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes. Use of this information is at the user's own risk. The user must make his own investment decisions based on his specific investment objective and financial position and use such independent advisors as he believes necessary.

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