Validation of KYC
SEBI has mandated that KYC records of all existing client (who have used Aadhaar or other OVD (Officially Valid Document)) shall be validated.
KYC records where Aadhaar has been used as OVD at the time of initial KYC- KRAs have sent email with a link to validate the Aadhaar. For investors without email ID – must revalidate KYC by submitting physical KYC modification request.
KRAs would verify PAN (including PAN Aadhaar linkage), Name, Address, Email address and Mobile Number.
KYC status where all the attributes mentioned above are verified with official databases would be updated as ‘KYC Validated’. KYCs, where any of the attributes mentioned cannot be verified with official databases would be updated as ‘KYC Registered’,
SRI (SEBI Registered Intermediary) who is onboarding a new investor with the KYC status as Registered would need to, perform a re-KYC and submit a modification request with all supporting documents to the KRA for getting the KYC “Validated/Registered”. If the modification request is put ‘On Hold’ / ‘Rejected’ by KRA, the SRI shall not allow them to transact further in the securities market till the KYC status gets ‘Registered’ or ‘Validated’.
PAN verification for all new folios
AMCs are mandated to validate PAN with Income Tax to ensure valid and correct PANs are stored in the investment. For this, AMCs push PAN and investors name through UTITSL/NSDL for validation of PAN at Income Tax.
This process will undergo change effective April 1, 2024, as per Income Tax directives. According to the change AMCs have to ensure below information is collected for all the holders, Guardian, POA and UBO, if not already available and passed for validation:
- Name as per PAN card / Name of the PAN Holder (Mandatory)
- Date of Birth / Date of Incorporation — DD/MM/YYYY (Mandatory)
- Father/Mother Name
The above verification will be done for following scenarios and for transactions reported across all platforms:
- PANs which are not validated
- PAN related NCT requests
- Transmission
- Minor to Major updation request.
Nomination for mutual fund investments
Investors must either update the nomination details or opt out of the nomination in the folio. In the absence of compliance before June 30, 2024:
- Mutual Fund folios may be restricted for transactions.
- Investors will not be able to redeem their investments.
- FMP maturity payout/IDCW payouts (if any) will be moved to unclaimed scheme/plan.
- The nomination can be made only by individuals applying for/holding units on their own behalf singly or jointly.
- In case of multiple unitholders in the folio, all holders need to sign the Nomination opt in/opt out form irrespective of the mode of holding being “Anyone/Either or Survivor”.
Two factor authentication (2FA) for transactions
- The 2FA validations for online transactions are implemented including for systematic
- Validation will be done with the email id/mobile number registered in the folio.
- Failure of 2FA validations may result in non-processing of transactions. Hence investors are requested to ensure that valid email ID mobile number is registered in their folio and intermediaries are requested to ensure these details are updated in their respective database.
- For channel partner and exchange platforms, email address and mobile number are validated (delivery status) at the time of initial transaction reported by the platforms. These validated email address and mobile numbers are considered for future transactions in the folio. Hence, it is important to report subsequent transaction with validated email address and mobile
Standard validation of Email and Mobile Number (family flag related)
- Investor’s own valid email id / mobile number should only be registered in their folios.
- The details will be checked for correctness (in terms of syntax, invalid numbers, domains etc.) and will be authenticated by sending an SMS / email directly to the unitholder’s email id and / or mobile number.
- Email IDs / mobile number of Distributors / AMC / RTA employees should not be registered against a folio unless it is an own investment.
- Investors will have to provide appropriate family declaration to register common email /mobile across family members.
