All you want to know about KYC rule relaxation for MF investors

Now, investors can continue to put in their hard earned money into mutual funds without presenting additional documents to the fund house or unit registrar

-  BENN KOCHUVEEDAN

One is the withdrawal of the mandatory requirement of linking the PAN with the Aadhaar from May 14, and the other is the doing-away of the mandatory inputting of a nominee in case if the MF investment account is a joint account from April 30.

What's KYC registration?

The know-your-client (KYC) regulation is the process by which financial entities such as commercial banks, mutual fund houses and stock brokers are asked to verify an investor's identity before being allowed to invest in stocks or mutual funds or enter the equity markets through mutual fund schemes.

In a revised circular issued on May 14, the regulator has done away with the requirement of the mandatory checking of PAN-Aadhaar link, offering a big relief to both existing investors as well as those looking to enter the market either directly into equities or passively through the mutual funds route the two investment avenues which have been rocking in recent months. Linking these two official identity documents enables an investor the all-important 'KYC-registered' status. In the second relief, it had done away with the mandatory nominee demand for joint MFs investments from April 30.

And all that the regulator wanted from an investor was to prove her/his identity based on the 'officially valid document (OVD) such as the Aadhaar, passport, the PAN number or the voter ID card.' 

What's the MF nomination?