Have you validated your Mutual Fund KYC yet?

Picture this. After days of painstaking research on the right funds, you are finally ready to invest in a mutual fund. You weigh all the options and zero in on the right scheme. But, just as you are about to hit the invest button, you are stopped in your tracks. The reason: Your KYC is incomplete.

This single issue could block you from seizing new investment opportunities that seem attractive, even though you have the funds and the will. It may even restrict you from managing your current holdings. The first step towards investing into Mutual Funds is making sure your KYC is validated.

The latest episode of Mint Money Shots, presented by Invesco Mutual Fund, saw Assistant Editor at Mint, Aprajita Sharma, delve into why validating your KYC is crucial for Mutual Funds. Watch the full episode below,

“With reference to the Securities and Exchange Board of India (SEBI) Master Circular, on Know Your Client norms dated October 12, 2023, a validated KYC is like a golden ticket – it indicates that your PAN and Aadhaar have been successfully verified by the issuing authorities. With this validation, you can invest in any mutual fund company without any hassle,” said Sharma.

On the other hand, if your KYC is only registered, it is like having a pass that only gets you so far. This typically happens when you have used documents other than Aadhaar for KYC. While you can still manage your existing investments, you will hit a roadblock when investing in new funds or with different Asset Management Companies (AMCs). To unlock full access, you must redo your KYC using Aadhaar to upgrade to the validated status.

How to know your KYC status?

Finding out the status of your KYC is as simple as a few taps on a smartphone screen. Just follow the steps mentioned below:

· Visit any mutual funds or Registrar Transfer Agent (RTA)’s website where you have an investment

· Next, check for the KYC status link, if available.

· Else, visit the Official Website of CDSL Ventures Limited and click on KYC inquiry

· Enter your 10-digit pan and captcha and click on Submit.

· Your status will be displayed as KYC validated, KYC registered, or KYC on hold.

If yourKYC status is “validated”, there are no further steps to follow. Going forward, you can make any transaction in any mutual fund at any time.

If yourKYC status is “registered”, you can continue making transactions like Purchases, Redemptions, Switches, SIPs, etc, in all your existing mutual fund investments without any hassle. Only if you want to invest in a mutual fund where you don’t have any investment already, you will have to do your KYC once again.

If yourKYC status is “on hold” or “rejected”, it means there is an issue. Either your mobile, or your email is not validated, PAN is not linked with Aadhaar, or something is missing in the KYC documents. “This can prevent you from making new investments or even managing current ones. The solution to this is validating your KYC,” said Sharma.

How to validate your KYC status?

There are two ways to change your KYC status from “registered” or “rejected” to “validated” – one is online and offline, and the second is only online.

· Online Method: The easiest way is by redoing your KYC using your pan and Aadhaar. This can be done online through any of your AMC’s websites or through the RTA website. Simply submit your Aadhaar and pan details and follow the steps to complete the validation process.

· Offline Method: You can download the KYC form from any of the AMCs, RTAs or AMFI websites and submit to any of your AMCs or RTAs offices.

What happens if I don’t validate my KYC?

Not completing your KYC validation process is not a good idea, as you may end up losing out on investment opportunities and give you a feeling of being stuck. “You can’t invest in new funds, and even your existing investments might become difficult to manage. Worse, if your KYC is ‘on hold’ or ‘rejected’, your investment journey could be halted altogether,” said Sharma.

In conclusion, completing and validating your KYC is an essential process that keeps your financial plans on track. So, if your KYC is not validated, complete the process today to ensure that your investment journey is smooth and uninterrupted. “Check your KYC status now and make sure you are all set to invest without any hedges. Remember, a validated KYC is your key to seamless investing,” Sharma concluded.