It is now mandatory to provide your name and date of birth in your mutual fund (MF) folio as listed on your PAN card or other provided proof of identity. You have to make sure that there is no mismatch, and if there is a mismatch, you should rectify it by April 30, 2024.
Mutual Fund Transfer Agency (RTA) like MF Central and CAMS have this message flashing on the homepage of their official websites.
POI, the mismatch in name/DOB of an investor in PAN and MF folio to lead to transaction rejection effective April 30, 2024.
According to the MF Central and CAMS website, “As per recent Master circular on KYC requirements of SEBI and changes advised by Income Tax Department in PAN validation process, now it is mandated to quote your Name(s) and DOB/I as per PAN card/POI. All Mutual Funds are mandated to validate the Name and DOB/I against the PAN available with Income tax department. To avoid any failure in such validations, we request investors to quote the Name(s) and DOB/I of all the holders including Guardian, Power of Attorney [POA] holders as per PAN card in all new application forms (physical and digital) and KYC forms.”
Note that transactions, including SIPs and redemptions, could get rejected by the RTAs if the name and date of birth on the MF folios and PAN do not match. However, we should wait for further clarifications on this to see what the repercussions will be in case a mismatch in details is not corrected by April 30, 2024.
List of documents valid as POI
Here are the lists of documents that are accepts as proof of identity, as per Sebi’s master circular on KYC requirements in the securities markets.
The name as mentioned in the KYC form shall match the name as mentioned in the Proof of Identity(PoI)submitted.
The following documents will be accepted as PoI:
a. Officially valid document (OVD)defined as per Rule 2 (d) of Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 (PML Rules):
i. the passport;
ii. the driving licence;
iii.proof of possession of Aadhaar number;
iv. the Voter’s Identity Card issued by Election Commission of India;
v. job card issued by NREGA duly signed by an officer of the State Government;
vi. the letter issued by the National Population Register containing details of nameaddress; or
vii. any other document as notified by the Central Government in consultation with the Regulator.
b. Further, in terms of proviso to the above Rule, where simplified measures are applied for verifying the identity of the clients, the following documents shall also be deemed to be officially valid document:
i. Identity card/ document with applicant’s photo, issued by the Central/StateGovernment Departments, Statutory/Regulatory Authorities,Public Sector Undertakings, Scheduled Commercial Banksand PublicFinancialInstitutions;
ii. Letter issued by a gazetted officer, with a duly attested photograph of the person.
Here’s are a few other important actions mutual fund investors should do to make sure there are no interruptions in their investments.
KYC updation by March 30
Stock market and mutual fund investors whose KYC documents do not match as per the officially valid documents need to update them by March 31, 2024. If this is not done, then their KYC status will be treated as invalid.
“As per the recent Master circular on KYC requirements and various directives from SEBI, KRAs are mandated to do independent validation of KYC records that have been submitted with documents other than Aadhaar as OVD (Officially Valid Documents). As per the process, Email and/or Mobile wherever registered in the KYC records are independently validated by the KRAs. If found as not validated, KYC status will be changed to On-Hold and Mutual Fund investors might be restricted from carrying out financial and non-financial transactions. For a seamless transaction experience, investors are advised to register their valid Email and/or Mobile in the KYC database through any one of the SEBI registered intermediaries by submitting the KYC change form and ensure the KYC status is always valid. In line with this requirement, investors who have completed the KYC process using any OVD applicable at that period and not falling under the below list of OVDs are advised to carry out KYC process again (re-KYC) using the below OVDs to keep the KYC status alive,” stated the MF Central website.
Nomination for existing individual investors
“Providing nomination or Opting-out confirmation has already been mandated in the case of new MF investors for folios created from 01-Oct-2022. Nomination in folios held by investors where folio was created prior to 01-Oct-2022 must be complied with on or before 30-Jun-2024. by either submitting nominee details or by providing Opt-out declaration. You may login to MFCentral platform to opt-out/opt-in of nominees instantly digitally,” according to the MF Central website.
