New norms kick in for mutual fund investors in the New Year

Starting January 1, 2016, existing mutual fund customers will not be able to purchase, sell or switch transactions if the investor hasn't complied with the additional KYC and Foreign Account Tax Compliance Act (FATCA) requirements. These details have to be furnished by individuals, joint holders, guardian of a minor and power of attorney holders, irrespective of whether they are Indians or non-resident Indian investors.

As per the recently issued SEBI guidelines detailing the disclosures required when investing in mutual funds, apart from the already existing paperwork, an investor has to provide declaration relating to US Foreign Account Tax Compliance Act (FATCA)/Common Reporting Standard (CRS), additional KYC information and Ultimate Beneficiary Ownership declaration from non-individual investors.

Where are KYC and FATCA forms available?

• A mutual fund investor can update the required details either online or offline.
• Forms for the same are available with individual mutual fund houses or registrar and transfer agents such as CAMS or Karvy.
• If an investor has exposure to various fund houses, then the easiest option is to fill an online form available on CAMS or Karvy website.
• One has to provide PAN and date of birth post which an OTP will be generated and sent on registered mobile number and e-mail address. Thereafter, one can access the form.
• Once the form is submitted, the records of mutual fund houses registered with CAMS or Karvy will be automatically updated

• SEBI has made it mandatory for all individual investors (existing and new) to provide additional details such as occupation details, gross annual income, net worth and political association if any.
• These details will be marked in the Scheme Application Form.
• This is in addition to the standard KYC form.
• In case of non-individual investors, it is now mandatory to provide the Ultimate Beneficial Ownership (UBO) details
• Apart from furnishing these additional details, the investor will have to complete the In-Person Verification (IPV).
• If the above details are not provided before December 31, 2015, the KYC status of the investor will be displayed 'On Hold'.
• If the KYC status is 'On Hold', then according to the latest circular of Association of Mutual Funds in India, the fund house cannot make any transaction in such an account.
• No new purchase or switch transactions will be allowed unless the KYC is updated or a new KYC form is processed.

In association with MAIL TODAY