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DYK: You have to update your KYC details for mutual fund investments

Fund houses and R&T agents have already started alerting investors to furnish Fatca and KYC details

Mutual fund (MF) investors have to submit declarations to their fund houses to comply with the Foreign Account Tax Compliance Act (Fatca), which was passed in the US in 2010 (read more on this here http://mintne.ws/1P0VCuk ). In addition to the Fatca details, fund houses are now required to implement the know-your-customer (KYC) requirements more thoroughly. Fortunately for you, the investor, both these details will be part of the same form that the fund house will ask you to fill.

FURTHER REQUIREMENT

In December 2013, the capital market regulator, Securities and Exchange Board of India (Sebi), had mandated that the earlier KYC form would be split in two parts. The basic details such an investor’s name, address, Permanent Account Number (PAN), and marital status, would continue to be a part of the KYC form. The other details (also known as supplementary details), such as income details, whether or not you are politically connected and net worth-related information, were moved as part of the intermediary’s (like an MF) application form.

Industry executives say that when the KYC form was split into two, and MFs were supposed to capture the supplementary information as well, some fund houses didn’t pursue the changes. As a result, many KYC records were found to be incomplete.

For uniform implementation among industry participants and to comply with the requirements of the Prevention of Money Laundering Act, 2002, obtaining supplementary KYC information has been made mandatory with effect from 1 November 2015.

From 1 November, new MF investors of a scheme have to give these details along with Fatca-related information. For existing investors, the information will be made mandatory from 1 January 2016.

Even if an investor is fully KYC-compliant, she will have to give both Fatca and supplementary KYC details. Further, the supplementary KYC details were earlier stored at the fund house level. Now, when you give these details, they will be stored with a registrar and transfer agent (R&T) and will be shared across fund houses.

WHAT SHOULD YOU DO?

Fund houses and R&T agents have already started alerting investors to furnish Fatca and KYC details. If you haven’t heard from them so far, you will hear from them soon. Meanwhile, you can also check with your distributor or financial adviser, or you can upload these details on the R&T website yourself. Computer Age Management Services Pvt. Ltd (Cams) was the first R&T to start the online facility; subsequently Karvy Computershare Pvt. Ltd, too, started the online updation facility. Both Cams and Karvy provide this facility for fund houses that they support. Enter the fund house name, PAN, date of birth and bank account number to generate a one-time password, which will be sent to your mobile phone. Once you key that in, you will be able to update your details. After this, all your folios will be updated by mapping your PAN.

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