What is KYC?
KYC or Know Your Customer is a customer identification process. The Securities and Exchange Board of India (SEBI) has laid down guidelines under the Prevention of Money Laundering Act 2002, which makes it binding for financial institutions and financial intermediaries like mutual funds to acquaint themselves with their customers. KYC process helps prevent money laundering and other suspicious transactions.
Who needs to get KYC Compliant?
Investors who want to make an investment in a mutual fund scheme either through a lumpsum or a Systematic Investment Plan (SIP) should complete the KYC process. KYC is mandatory irrespective of the investment amount. A one-time verification is all that is needed for transactions across all mutual funds. If you are one of the following you must comply with KYC norms:
- Individual(s) or Non-Individual(s)
- A guardian who is investing on behalf of a minor
- Constituted Power of Attorney (PoA) holder(s) Constituted Power of Attorney (PoA) holder(s)
- In case you have become an investor due to operation of law, e.g. in case of a death of an investor.
How can I get KYC compliant?
Complying with KYC norms is easy and a one-time process. If you have completed the KYC process earlier through a SEBI-registered intermediary like a broker, DP, mutual fund, etc., you don’t have to undergo the KYC process again. Investors who need to get KYC complaint must submit the following documents:
- KYC application form filled out by each applicant including joint unit holders.
- Documents showing proof of identity and proof of address.
Will I have to appear in person for KYC?
Yes. In person verification is mandatory.
Important points to remember
- KYC is a one-time process.
- KYC is mandatory.