KYC is an acronym for “Know your Client”, a term commonly used for the Client identification process. Basically, the identity and address of investors is verified. All applicants must be KYC compliant while investing with any Mutual Fund.However investors may need to open accounts with other SEBI registered intermediaries for the purpose of trading / investment in the securities market, and have to undergo the same process of KYC again and again. Therefore, to avoid duplication of the KYC process with every intermediary, a mechanism for centralization of the KYC records has been developed by SEBI. W.e.f January 2012, SEBI has introduced a common KYC application form for all the SEBI registered intermediaries viz. Mutual Funds, Portfolio Managers, Depository Participants etc.
I. KYC to be verified by a KRA
Earlier each financial intermediary like depository participant would do its own KYC and register an investor account. For Mutual Funds the process was centralised with CDSL Ventures Ltd (CVL) and MF investors would go to any Point of Service of CVL and submit the KYC form.
Now SEBI allows KYC verification for all SEBI intermediaries through a KYC Registration Agency (KRA). There are expected to be a few KRAs servicing investors. However, currently the only KRA is CVL. I will update this post with details of other KRAs and please comment if any reader has information on other KRAs.
II. Process for first time investors in Mutual Funds:
Such investors who have not completed the earlier KYC process with CDSL Ventures, should do the following:
1. Download the KYC application form here and fill in the details - all requirements for proof of address and proof of identity are given therein.
2. Mutual Fund investors have to currently submit this form only along with a transaction slip for purchase / switch of units. I understand that a stand-alone from is not accepted! Therefore, fill in the application form for purchase of units and submit to the Service Centre along with this form.
3. Investors would have to visit the Service Centre of the Mutual Fund (or Registrar, if the Fund has authorised the Registrar) and submit the form in person.
4. (In-person verification) IPV of the documents has to be done by the AMC or the intermediary.
5. The MF Service Centre executives will scrutinize and stamp the application form - KYC APPLICATION RECEIVED. This is itself a confirmation of submission of the form and documents.
6. Documents will be forwarded by the intermediary i.e. the Mutual Fund to the KYC Registration Agency (KRA) and the KRA will send a letter to the investor within 10 days confirming the details.
7. This IPV at the Mutual Fund Service Centre is sufficient for an investor to start investing, while the KRA completes the rest of the process. (Attach the KYC acknowledgement with future transaction slips till KYC is verified)
8. Investors may check here --> https://www.cvlkra.com/ if KYC is verified successfully. Once verified, investors can attach the screenshot whenerver they invest.
9. Once an investor status is verfied, any SEBI registered intemediary can upload the investor KYC status from the KRA and investors need not undergo the process again.
III. Mutual Fund investors who are already KYC Compliant earlier with CVL
Many investors have already completed the process earlier with CVL. This is still valid - but only for investing in Mutual Funds. If they wish now to register with other intermediaries in the securities market, they have to go through the process once more!!! It is advised that they complete the process with a KRA.
If any reader has additional details and clarifications on the KYC process, please comment and share. I will update this post.
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