What's the story

The Securities and Exchange Board of India (SEBI) has proposed a major change in the way new mutual fund folios are opened and first investments are executed. The proposal, which is still under consultation, seeks to standardize these processes across the board. The move is aimed at tackling operational and compliance challenges arising from incomplete Know Your Customer (KYC) verification during folio creation.

KYC requirement

KYC compliance mandatory for new folios

As per the proposal, new mutual fund folios will only be allowed to make their first investment after being marked as KYC-compliant by a KYC Registration Agency (KRA). This is different from the present practice, where Asset Management Companies (AMCs) sometimes process investments immediately after thei

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