KYC - A PRE-REQUISITE BEFORE INVESTING IN MUTUAL FUNDS.
Before investing in a mutual fund scheme, whether through online mode or via conventional paper-based mode,
one must first complete the KYC process by filling up the prescribed KYC form.
KYC stands for "Know Your Customer" and is a term used for Customer Identification Process as a part of
account opening process with any financial entity. KYC establishes an investor’s identity & address through
relevant supporting documents such as prescribed photo id. (e.g., Passport, Aadhaar or PAN card) and address
proof. KYC compliance is mandatory under the Prevention of Money Laundering Act, 2002 and Rules framed
thereunder.
WHAT IS KYC?
KYC, which stands for "Know Your Customer," is a term used to refer to the process of identifying customers
during the account opening process with any financial entity. The purpose of KYC is to establish the identity and
address of the investor through relevant supporting documents such as prescribed photo ID (e.g., PAN card) and
address proof, as well as In-Person Verification (IPV).
KYC compliance is mandatory under the Prevention of Money Laundering Act, 2002 and Rules framed there
under, read with the SEBI Master Circular on Anti Money Laundering (AML) Standards/Combating the
Financing of Terrorism (CFT)/Obligations of Securities Market Intermediaries.
A standard Account Opening form (AOF) is generally divided into two parts. Part I contains the basic and uniform
KYC details of the investor as prescribed by the Central KYC registry (Uniform KYC) to be used by all registered
financial intermediaries. Part II contains additional KYC information that may be sought separately by the
financial intermediary, such as a mutual fund, stockbroker, or depository participant opening the investor’s
account (Additional KYC).
