Mandated by the Prevention of Money Laundering Act, 2002, the Know Your Customer process is now mandatory. The KYC process helps banks and NBFCs know their customers as the form, once duly filled, can provide a lot of information about their clients.
In its reforms , this is one of the most effective move by the SEBI, in the light of recent money laundering and increase in the number of defaults by customers on various loans like home loan, car loan etc.
But in case of Mutual Funds, investors have to complete the KYC formalities with an identified service provider, CDSL Ventures. This is just a one-time procedure, which the investors should not get vexed about and is applicable to all Mutual Funds registered with SEBI.
If you already invested in Mutual Funds, then you require completing this formality before going ahead with further investments. There are various points to bear in mind:
The information provided in the application has to be submitted along with identity proof (PAN card), and address proof (passport, driving license, etc). The application has to be submitted at designated points of presence of CDSL Ventures. The list can be downloaded from http://tinyurl.com/3mxmv2h.
Requirements:
- Investments in mutual fund can be made only after receiving the KYC acknowledgement from the concerned point of presence or investor service centre.
- The original documents provided as proof of identity and address are verified at the time of accepting the application and copies are appended to the application.
- If the document provided as address proof has a validity date, it should not have expired at the time of presentation.