Several documents are required by registration agencies to complete the Know Your Customer (KYC) process for mutual fund investors. They include KYC forms and proofs of identity and address.
KYC compliance is a prerequisite for mutual fund investment. You need to complete KYC formalities for such investment. To begin with, the institution concerned will provide you with a KYC form. You must fill this in and furnish documents to support the information provided.
The Reserve Bank of India (RBI) introduced the KYC norms in 2002. Such norms came into being to cut down on corrupt practices like money laundering, fraud, and financing of terrorist activities. Such activities are often carried out via banks and other financial institutions. With the KYC norms in place, banks and other financial institutions find it easier to track their customers and transaction trails. The KYC rules have also been adopted by the insurance and commodity trading sectors. The Securities and Exchange Board of India (SEBI) has made KYC compliance mandatory for mutual fund and broking accounts.
The KYC process is your first step towards investing in mutual funds. As a new investor, you should approach a KYC registration agency (KRA) to complete the formalities. It is usually a one-time process for mutual fund investors. After this, you can invest in any mutual fund from a fund house of your choice.
If you are a new investor, you must fill up a KYC form and a trading account application form. You can get these from Kotak Securities or any other KRA of your choice. Most of the application forms require details like your name, address, office address, joint account holder details, account nomination, and so on. These details are part of your identification. The KYC–KRA form is a must as all investors have to follow SEBI norms before they can start trading in any assets.
The KRA will typically ask for a copy of your PAN card. But some other documents are also acceptable as proof of identity. These include:
If the document submitted as identity proof does not contain your address, another valid document will be required to furnish your address details. The approved documents include:
When you open an account with a fund house or a brokerage, you must link it with your bank account. For this reason, you should provide a blank cheque. The IFSC number mentioned in the cheque would help identify the branch your bank account belongs to. Similar documents are required when you open a trading or demat account.
Once you have submitted all the documents, the KRA will conduct an in-person verification. The purpose of this verification is to re-check your identity and address details. This is mandatory as per the SEBI rules. Typically, the KRA will set up an appointment with you. You will have to carry the original documents listed in your application forms for verification. The fund house concerned will upload your details on the KRA’s system after the verification process is complete. You will then receive a notification from the KRA. This completes the process—you are now set to invest and trade freely in the securities market.
To speed up the process, you could opt for the Aadhaar-based electronic KYC (eKYC).
Your KYC documents help you embark on your journey as a mutual fund investor. If you wish to fast-track the process, you can always opt for the Aadhaar-based eKYC.
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