The Securities and Exchange Board of India (SEBI) has prescribed the financial institutions and intermediaries a set of requirements under the Prevention of Money Laundering Act (PMLA) Act of 2002 to know and verify their customers.
The SEBI-authorised financial institutions like Asset Management Companies (AMCs) and Registrar and Transfer Agents (RTAs) need to perform mandatory due diligence of the investors by collecting their original documents – PAN, Aadhaar, etc., photograph, in-person verification, and so on. This is known as the KYC process, and if you want to invest in any mutual fund schemes, you must be KYC compliant.
‘Know Your Customer’ – KYC is an important process carried out to identify a customer when he opens an account with any financial institution or a mutual fund house. If you are a new investor, you can complete the KYC process via two routes, offline and online, with OTP-based Aadhar authentication.
There are AMCs and RTA websites, like CAMSonline and K-Fin, etc., that avail the existing e-KYC solution. It enables new investors to complete the KYC process digitally and make investments in desired mutual funds without any hassles or paperwork. KYC for mutual funds is a mandatory prerequisite for all investors; however, what happens if your KYC details are not the same anymore, and you need to update them? Let us help you:
How to update your KYC details?
To update your mutual fund KYC, you will have to fill ‘KYC details change’ form or KYC Modification/Updation form. You can get this from the website of fund houses and RTAs such as CAMS and K-Fin. After filling up the basic details such as name and PAN number, choose the field which you want to change. For example, to change your address, you must give a self-attested copy of any one of your passport, electricity bills, latest bank statement, etc. In case the address for communication and permanent address differs, then the supporting documents for both need to be submitted.
Having said that, an investor who is doing the KYC process for the first time ever can avail the benefit of online KYC. However, in case you need to update or modify your KYC details, you have to opt for the offline route.
KYC modification can soon be online…
Recently, while speaking at the Independent Consultants & Advisor Association (ICAA), Mr NS Venkatesh, CEO at AMFI, said, “The Mutual Fund industry will facilitate KYC modification completely online with the advent of 5G technology. While the industry currently facilitates online KYC at the time of onboarding, modification of KYC still happens through the physical route. As a result, the mutual fund industry and RTAs have been working to make the KYC modification process completely online.”
Furthermore, showcasing the possibilities in the mutual fund sector, Mr Venkatesh said, “India has over 40 crore PAN card holders and over 8 crore people have filed income tax returns. Currently, the MF industry has 4 crore investors, which indicates that the industry has a long way to go. AMFI has consulted PwC to understand how they can increase the scope of AMFI to match with the global best practices.”
As a result, this indicates that investors will soon be able to perform the KYC modification process online without any hassles of paperwork and submission to the AMCs or KRAs. At the moment, there are few fund houses and RTAs that provide investors with the option to modify their KYC online. In light of this, AMFI is putting emphasis on and taking action to create a fully online KYC modification procedure similar to KYC onboarding.
Do note that, regardless of the RTA that services the fund houses, when you update your mutual fund KYC with one fund house or one RTA, the same gets reflected with all fund houses. Nevertheless, when you modify your mutual funds KYC information, your KYC in banks and Demat accounts remains unchanged. It may take some time before there is a centralised KYC across all financial products. However, preparations have already started.
