Starting April 1, 2024, new KYC (Know Your Customer) rules for mutual fund investors have been implemented. Under these rules, investors must be “KYC Validated” to invest in any mutual fund scheme without additional paperwork. Those with “KYC Registered” or “KYC Verified” status can retain their current investments but need to submit documents again for new investments.
“KYC Validated” status means that the KYC Registration Agency (KRA) can confirm an investor’s Proof of Address and Proof of Identity with official sources like the Income Tax Department database or Aadhaar. If an investor’s PAN and Aadhaar are linked or do not need to be linked, and their email and/or mobile are verified, they receive “KYC Validated” status. This status allows investors to invest in different mutual fund schemes without resubmitting KYC documents, as long as their information remains unchanged.
Type of OVD used: Aadhaar
KYC status till March 31, 2024: Validated
KYC status from April 1, 2024: KYC Validated – Where OVD data is validated with the issuing authority, i.e. UIDAI, PAN-Aadhaar linking done, and email and/or mobile is validated.
Type of OVD used: Aadhaar (Physical)
KYC status till March 31, 2024: Registered
KYC status from April 1, 2024: KYC Registered – Where Aadhaar OVD data could not be validated with the issuing authority i.e. UIDAI, PAN-Aadhaar linking seeded, and email and/or mobile is validated.
Type of OVD used: Non-Aadhaar OVDs (Allowed OVDs)
KYC status till March 31, 2024: Registered / Verified
KYC status from April 1, 2024: KYC Registered – Where the proof cannot be validated with the issuing authority and email and/or mobile is validated.
Type of OVD used: Non-Aadhaar OVDs (Allowed OVDs)
KYC status till March 31, 2024: Registered
KYC status from April 1, 2024: KYC On-Hold – Where the proof cannot be validated with the issuing authority and email and/or mobile is not validated.
Type of OVD used: Deemed OVDs (other than Allowed OVDs)
KYC status till March 31, 2024: Registered
KYC status from April 1, 2024: KYC Registered – Where the proof cannot be validated with the issuing authority and email and/or mobile is validated.
Type of OVD used: Deemed OVDs (Other than Allowed OVDs)
KYC status till March 31, 2024: Registered
KYC status from April 1, 2024: KYC On-Hold – Where the proof cannot be validated with the issuing authority and email and/or mobile is not validated.
Type of OVD used: Non-OVDs (other than listed)
KYC status till March 31, 2024: Registered
KYC status from April 1, 2024: On Hold
Type of OVD used: Invalid contact details [Email and / or Mobile] – irrespective of OVDs submitted
KYC status till March 31, 2024: Registered
KYC status from April 1, 2024: On Hold
If an investor’s KYC is not validated, their status is marked as “KYC Registered.” In such cases, investors can still invest with other SEBI-registered intermediaries but need to provide KYC documents again, even if their information has not changed.
Aadhaar is crucial for changing KYC status to “KYC Validated.” Without Aadhaar, KRAs cannot independently validate an investor’s information, which is necessary for obtaining “KYC Validated” status. Using Aadhaar for KYC simplifies the process and eliminates the need for multiple KYC modifications across different fund houses.
Resident individuals with “KYC Verified” or “KYC Registered” status can continue investing in existing mutual funds. However, to invest in a different fund house for the first time, they must submit a KYC modification request along with their investment application. Investors with “KYC Validated” status can invest in any mutual fund without submitting additional KYC documents. Non-Resident Indian (NRI) investors must submit a KYC modification in all cases unless they have “KYC Validated” status.