Are you a mutual fund investor?Learn why March 31st matters

Failure to submit KYC documents may restrict your mutual fund trading.

March 31 marks the end of the fiscal year, and businesses and individuals are preparing for changes that come into effect on April 1. With the new fiscal year, some adjustments and expectations are coming. An important change will come into effect for mutual fund investors as they will once again have to complete the Know Your Customer (KYC) exercise. The Registrar and Transfer Agent (RTA), Computer Age Management Services or CAMS and KFin Technologies (KFintech) have sent emails to mutual fund distributors (MFDs) highlighting the need for action.

What do investors need to do?

As per the guidelines, mutual fund investors who have not done KYC based on official valid documents must compulsorily complete it by March 31.

Valid documents include Aadhaar card, passport and voter ID card, the email showed. After this deadline, KYC completed based on evidence such as bank statements and utility bills will no longer be valid.

What happens if an investor misses the deadline?

Starting April 1, 2024, people who fail to submit official documents for redo KYC will not be able to trade in any mutual funds.

These transactions include Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP) or redemption.

Those receiving the services of a mutual fund distributor (MFD) will be notified of the deadline via email and other communications. But people who invest on their own don’t necessarily get the hint.

How to do mutual fund KYC again?

Investors need to contact Central Depository Services Limited (CDSL) Ventures Limited, a SEBI authorized Know Your Customer (KYC) registration agency.

It’s worth noting that this process cannot be completed online. To register for (proper) KYC again, investors need to submit a physical KYC form along with documents to the mutual fund house or RTA.

Why is this needed?

Some investment services agencies stated that re-KYC is being carried out to ensure compliance with the SEBI notification of October 12, 2023 and the Prevention of Money Laundering (Maintenance of Records) Rules, 2005.