Mutual Fund news update:
The Association of Mutual Funds of India (AMFI) disclosed that only 3% of mutual funds are currently in the ‘KYC Hold’ status under the new mutual fund KYC regulations implemented since April 1st.
Venkat Chalasani, CEO of AMFI, announced that as of now, 93% of accounts have either KYC registered or KYC validated status, with only 3% experiencing ‘KYC Hold’ status. In April, equity mutual fund inflows decreased by 16%, amounting to Rs 18,917.09 crore compared to Rs 22,633.15 crore in March. The net asset under management (AUM) of the industry in April rose to Rs 57.25 lakh crore from Rs 53.4 lakh crore in the previous month. Following outflows of Rs 94.17 crore in March, small cap MF witnessed inflows of Rs 2,208.7 crore in April.
Speaking on the mutual funds data for April, Chalasani stated, “AMCs, distributors, and other stakeholders are committed to facilitating a seamless KYC validation process for all, ensuring the integrity and accessibility of mutual fund investments across the board.”
He further explained SEBI’s latest directive on KYC norms:
- Investors with KYC-verified status can invest in any MF scheme.
- KYC-registered investors can continue investing in Asset Management Companies (AMCs) where they already hold investments.
- Investors with KYC Hold status should rectify their KYC status promptly with valid documents.
On April 24, the five KYC Registration Agencies (KRAs) in the Indian mutual funds industry reported that nearly 73% of KYC records are classified as ‘KYC Validated’, 15% as ‘KYC Registered’, and the remaining 12% as ‘KYC On-Hold’.
Previously, it was reported that approximately 1.3 crore MF accounts were ‘on hold’ due to incomplete KYC, as individuals failed to provide non-Aadhaar and non-officially valid documents (OVDs) during the initial KYC registration process. According to Sebi’s new rules, investors with an ‘on hold’ KYC status cannot conduct transactions in mutual funds.
Regarding the MF KYC process, Sebi regulations have eliminated utility bills and bank account statements as valid documents for KYC compliance. This measure aims to strengthen the KYC process and ensure the authenticity of provided information. Individuals are now required to update their KYC with both PAN and Aadhaar cards, linking the two documents together.
- KYC Validated: Documents submitted are authenticated by the issuing authority, allowing investors to invest in any MF scheme without complications. Only PAN and Aadhaar details are eligible for direct verification, expediting KYC approval for those who submitted them.
- KYC Registered/Verified: Documents provided could not be independently verified, allowing investors to invest in any mutual fund house by resubmitting the required documents.
