What are KYC forms?
The mutual fund investment market in India has spread across the country since the last few years. With many new investment avenues and products, the choice remains yours. Also, with online mutual funds, beginners can handle their favorite investments in a better way. When it comes to investments, some of the main factors to consider include investment returns, investment types, performance and KYC.
“Know Your Customer” KYC is a term used to simply identify investors and collect the necessary information before they start their investments. It is mandatory for all investors and applicants to understand the norms and rules for the same. Know Your Customer is an international concept where data collected from investors is used to avoid identity theft, fraud, money laundering and terrorist financing. Using this form, financial institutions and banks can identify investors.
Becoming KYC Compliant
In the field of mutual fund investment, the importance of KYC cannot be ignored. When you decide to invest in the mutual funds for the first time, you should send a copy of it along with the investment application forms. An investment application form that is without KYC confirmation is never approved. To become KYC compliant in India, investors need to file the following documents with CVL, which is a subsidiary of Central Depository Services Limited:
• PAN card
• Proof of residence documents such as passport, utility bill or letter from housing association secretary
• Fully filled KYC application form
After you submit all the required documents with the investment application form, the financial institution or bank does a proper KYC check to approve the application. Once the application is approved, you are free to start your investments by choosing your favorable paths.
Mutual funds in India have always proved beneficial for all investors. Considering the benefits of investing and the wide range of products, even foreigners prefer to multiply their money with Indian investments. Generally, KYC is applicable for the following types of transactions:
• Systematic registrations of investment plans
• STP registrations along with all STP related products
• Switch transactions or new purchases
• DTP registrations and any DTP related products
For all existing DTP, STP or SIP registrations and related products, these norms are valid on the date of acceptance of the application. Existing and new mutual fund investors should submit their KYC application forms before investing. To help investors submit the documents, registration is centralized by KYC KRA registration agencies that are registered with SEBI. Financial institutions and investment agents offer detailed information on these norms for investors. Go online to take advantage of updates on Know Your Customer norms and understand the basics of investing. Contact your financial advisor or investment agent to better understand all of these norms and available investment avenues. Multiply your money with the investment product that suits your personal needs and financial goals.
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