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The Mutual Fund investment market in India has expanded across the country over the past few years. With so many new investment avenues and products out there, the choice is yours. Moreover, with online mutual funds, beginners are able to deal with their favorite investments in a better way. When it comes to investments, some of the essential factors that you should keep in mind include returns from investments, type of investments, performance and KYC.
The term ‘Know Your Customer’ KYC is used only to identify investors and collect the necessary information before they start their investments. It is important for all investors and applicants to understand its norms and rules. ‘Know your customer’ is an international concept where data collected from investors is used to avoid identity theft, fraud, money laundering and terrorist financing. With the help of this form, financial institutions and banks are able to identify investors.
KYC Compliant
The importance of KYC cannot be ignored in the field of mutual fund investment. When you decide to invest in mutual funds for the first time, you will need to submit a copy of the same along with the investment application form. An investment application form without KYC acknowledgment is never approved. To become KYC compliant in India, investors need to submit the following documents to CVL which is a secondary part of Central Depository Services Limited:
• Pan Card
• Documents for residential proof such as passport, utility bill or letter from the secretary of the housing society
• Completely filled KYC application form
Once you submit all the required documents along with the investment application form, the financial institution or bank does the appropriate KYC verification to approve the application. Once the application is approved, you are free to start your investment by choosing the path that suits you best.
Mutual funds in India have always proved to be beneficial for all the investors. Considering the wide range of investment benefits and products available, even foreigners prefer to grow their money with Indian investments. Generally KYC is applicable for the following types of transactions:
• Systematic Investment Plan Registration
• STP registration with any STP related products
• Change transaction or new purchase
• DTP Registration and any product related to DTP
For any existing DTP, STP or SIP registration and related products, these norms are valid on the date of acceptance of request. Existing and new mutual fund investors need to submit their KYC application forms before investing. To help investors with document submission, registration is centralized by KYC registration agencies (KRAs) that are registered with SEBI. Financial institutions and investment agents provide detailed information on these criteria to investors. Get online to get updates on KYC norms and understand the basics of investing. Consult your financial advisor or investment agent to better understand all these parameters and the available investment avenues. Multiply your money with the investment product that matches your individual needs and financial goals.
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