Recently, I have started learning share trading on my own. I took an ICICI trading account and initially started with IPOs. If you know or not, recent Coal India IPO was a big hit making 40% profit for retail investors within days of listing. I already tried investing in mutual funds and made good returns too. I was investing through Way2Wealth before. As I got the trading account, I tried to invest in mutual funds through my trading account. After I have gone through the mutual fund research, I selected a fund, selected the amount, and clicked the apply button. It showed the error “KYC Details Are Not Found.”
So, I called the ICICI Direct people and found that my KYC Status is not found on the Central Depository Services and I need to update it by providing address and identity proofs. They sent me the KYC form. I filled and submitted it at the ICICI Direct.
So, I have done a little research and learned about the KYC Norms implemented by SEBI.
What is KYC?
KYC – Know Your Client/Customer is a term used for client/customer identification. Financial institutions need to know who the customer is, need to verify the address, and know about the financial and occupational status. It is mandatory that investors have to be KYC compliant if they are investing more than 50,000 in mutual funds. The provisions of The Prevention of Money Laundering Act, 2002 (PMLA), has made it mandatory for all Mutual Funds to comply with the KYC norms of the applicants desirous of subscribing to their ‘units.’
For this process, CDSL Ventures Limited (CVL) has been formed by the Mutual Fund industry to create the necessary infrastructure to handle the KYC on behalf of the Mutual Fund Industry. CVL is handling the work of “Customer profiling and Record Keeping” for issuance of Know Your Client (KYC) acknowledgment to mutual fund investors.
How to update the KYC?
Download the KYC form here. Take a print out, fill it, add address proof and ID proof, and hand it over at the Investor Service Desk of your bank/trading service provider/CVL Point of Service.
KYC is linked to your PAN and you don’t need to fill KYC form for every mutual fund you are subscribing for. Just do it once and it will available for all you investments that is the biggest advantage of having updated the KYC in CVL.