NPO (Non-Profit Organisation)
- Reference to PML (Provision of Money-Laundering) Amendment dated Mar 07,2023, if the Trust, Society or companies as defined in amendment is an NPO, then it must get itself registered in the DARPAN Portal of NITI Aayog https://ngodarpan.gov.in . This has been made mandatory as per PML amendment dated March 07, 2023, requiring the financial institutions, intermediaries to get the NPO entities registered in DARPAN before allowing transactions.
- Completing the NPO Darpan Registration process is necessary for making investments and other financial transactions. “Non-profit organization” means any entity or organisation, constituted for religious or charitable purposes referred to In clause (15) of section 2 of the Income-tax Act, 1961 (43 of 1961), that is registered as a trust or a society under the Societies Registration Act, 1860 (21 of 1860) or any similar State legislation or a Company registered under the section 8 of the Companies Act, 2013 (18 of 2013).
- New accounts / folios will not be created for NPOs by the Mutual Funds, without such
- MFs/RTAs need a declaration from the NPOs along with the DARPAN registration certificate. All applicable Trusts/Societies/ Section 8 companies should submit the details in the NPO declaration form.
- Other Trusts/Societies who do not fall under the new NPO definition should confirm that they are not falling under the said NPO definition by submitting the NPO declaration form.
- NPO declaration and NPO registration in DARPAN are required from existing as well as new investors who are Trusts, Societies and Section 8 Companies.
UBO (Ultimate Beneficial Owner)
- As per revised guidelines the controlling ownership interest % has been revised from 25% OR 15% to 10% for Corporate/Trust, to consider as an UBO.
- If no individual is identified as UBO, basis the above threshold, then details of Senior Managing Official (SMO) should be provided as UBO.
- The following UBO details are now made mandatory.
- PAN of UBO
- Country of Tax Residency of UBO
- TIN (Tax Identification Number)
- UBO’s Date of Birth
- UBO PEP (Politically Exposed Person) information.
- % of Controlling / Beneficial interest
- UBO KYC status as validated.
- Transactions will not be allowed unless UBO/SMO PAN is KYC Complied
- You can visit any of the KRA websites and check the KYC status of the UBO. E.g, visit the link for CVL KRA (https://www.cvlkra.com/ ) Go to KYC Inquiry > Search KYC > Enter PAN No > Verify CAPTCHA > Submit.
- Wherever PAN is not applicable for UBO or SMO (E.g., If the UBO / SMO is a foreign national), TIN must be provided.
- The NPO / UBO declaration need not be submitted separately for each fund. These declarations are required at MF RTA level (i.e., CAMS and Kfintech) separately. Once these are submitted to RTA, it will get updated for all MFs serviced by that RTA.
Other Regulatory requirements:
Income Slab: Income Declaration is mandatory; we would like to highlight that investment applications are submitted with the assumption that the information will be updated from KRA. However, KRAs do not capture this information and hence if income slab values are not available on the investment application form, transactions will be liable for rejection.
Tax Identification Number (TIN) for all NRI Categories: TIN is mandatory, wherever investor has declared the country of tax residency other than India in FATCA/CRS Declaration.
Overseas address for all NRI Tax Categories: Overseas address is mandatory on the application form.
IFSC Code: IFSC code is mandatory for all folios. This also enables to complete the bank account verification and third-party validation through penny drop mechanism.
