While noting that the mutual fund industry is addressing concerns for a smooth KYC process, AMFI CEO Venkat Chalasani said, “Together with AMCs, distributors and other stakeholders, we are committed to facilitating a seamless KYC validation process for all, thereby ensuring the integrity and accessibility of mutual fund investments across the board.”
“If KYC was to be an issue, then you clearly would have seen a downtick in transaction count. Amounts may not necessarily be the best indicator. It is really the number of transactions. And I think we have to, from a perspective of the industry, thank the regulator as well because they have also been pushing all of us, AMCs, MFDs, RIAs, etc, to make sure we handhold the customer,” said Anthony Heredia, MD & CEO of Mahindra Manulife Mutual Fund.
“I would not call KYC an issue. I just would call it for certain sets of investors, typically those who have invested maybe five years, eight years back, there is some hoops they have to cross and I think just putting your data in a validated format in today’s technology age where there is so much cyber security incidents happening is just a good thing for customers,” he added.
Monthly data showed that mutual fund folios reached an all-time high of 18,14,68,286 in April.
According to an earlier report, around 1.3 crore MF accounts were said to be ‘on hold’ due to incomplete KYC as many individuals have provided non-Aadhaar and non-officially valid documents (OVDs) during the initial KYC registration process. As per the new rules set by the Securities and Exchange Board of India (Sebi), effective from April 1, 2024, investors with an ‘on hold’ KYC status will not be able to carry out any transactions in mutual funds.“Of nearly 11 crore investors, about 7.9 crore or 73% have valid KYC. KYCs of about 1.6 crore investors are under the registered category, who now have limited access to investing, while 12% of the total can’t operate their demat accounts and MF folios,” according to an earlier report by Times of India.An investor should first check the KYC status before making any investment.
According to AMFI, if the status of KYC is shown as “KYC Hold” it could be because the mobile or email is not validated / PAN is not linked with Aadhaar/ deficiency in the KYC documents. Once the KYC status is changed to registered / validated, an investor can start transacting again.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
