Mutual fund (MF) investors received a last-minute reprieve from the March 31 deadline to revalidate their know-your-customer (KYC) records, allowing them to continue transactions without interruptions.
According to a communication from CDSL Ventures to mutual fund distributors (MFDs) on March 28, 2024, MF investors no longer need to re-do the KYC for their existing MF folios. This means they can proceed with transactions like systematic investment plans (SIPs), systematic withdrawal plans (SWPs), or redemptions in their existing folios without any hindrance.
Earlier, failure to update KYC records would have blocked investors from conducting any MF transactions starting April 1, 2024, if the original KYC was not based on any of the officially valid documents. This information was communicated to MFDs via emails from registrar and transfer agents (RTAs) — CAMS and KFin Technologies — around the first week of March. The deadline for re-KYC was initially set for March 31, 2024.
Officially valid documents include Aadhaar card, passport, and voter ID card, among others, as per the emails. Bank statements and utility bills are no longer considered valid for KYC purposes.
While existing investors are not required to redo their KYC, they still need to validate their mobile number/email ID as per KYC records. Failure to do so will put the investor’s KYC ‘on hold’ from April 1, 2024, as per the latest communication from CDSL Ventures.
For mobile/email ID validation, investors can enter their PAN and other details on the provided platform. Upon submission, they will receive either a verification message or an OTP to complete the process.
Regarding KYC for new investors and folios, new MF investors must complete their KYC based on officially valid documents. Existing MF investors making new investments do not need to redo KYC for existing folios, but they must do so for new folios based on officially valid documents.
Clarity on this matter is essential, according to industry experts, as there is a lack of clarity in communication from RTAs or KRAs. Most of the communication has been between RTAs or KRAs and MFDs, leaving out direct plan investors.
