New Delhi: The Association of Mutual Funds of India has now made it mandatory for investors to update the Permanent Account Number (PAN) information in their mutual fund folios to be able to redeem their investments. The directive follows a recent inspection by the Securities and Exchange Board of India (Sebi), wherein it was found that mutual funds and registrar and transfer agents (RTAs) had processed redemption requests even for folios where PAN details were not available.

Mutual fund investors are required to provide PAN details at the time of completing know-your-customer (KYC) formalities.

However, some categories of investors are exempt from providing PAN details. Investors who invest up to 50,000 per year per mutual fund are not required to furnish PAN. These investors can provide other approved proofs of identity in lieu of PAN and are allotted PAN-exempt KYC reference number (PEKRN).

Investors who now need to update PAN details in their folio can do so either on the website of mutual fund or the RTA or physically submit PAN details along with the updated PAN copy to the mutual fund’s office or investor service centers. RTAs such as Cams Investor Services Pvt. Ltd and Karvy Data Management Services Ltd have provided online facilities to provide PAN details in folios where PAN information is not available or to update the information if available PAN details are invalid.

Investors can log on by selecting the relevant AMC and providing the folio number. The date of birth or default bank number should also be provided for authentication. A self-attested copy of PAN of all holders should be uploaded. The image file should not exceed 1MB. The signature will be validated against the records with the RTA before PAN is updated. The investor will be informed once this is done. This will have to be done individually for each mutual fund in which the investor has investments.

A more efficient way would be to update KYC and PAN details using the KYC/KYC change request form to update the details with the KYC Registration Agency (KRA) such as Cams and Karvy. The RTAs will receive PAN/KYC details from KRAs and facilitate updation of this information across all mutual funds in which the investor holds investments.

If a folio has not been updated with PAN details, then the financial and non-financial transactions, including redemptions, are likely to get rejected. Investors who need to redeem before the updation of PAN details in the folio should provide the same at the time of redemption along with a self-attested copy of PAN cards.

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