What does CKYC mean for mutual fund investors?

From Feb 1, 2017, new investors in mutual funds will have to do CYKC (Central Know Your Customer) before investing. The CKYC will replace the existing KYC.

What is CKYC?
Central KYC Registry, or CKYCR, will re place the existing multiple KYC submission processes one needs to go through for various financial transactions, such as opening bank accounts, buying life insurance, and investing in mutual funds. The government has authorised the Central Registry of Securitisation and Asset Reconstruction and Security Interest of India (CERSAI) to manage the CKYC Registry process.

Why has CKYC been undertaken?
CKYC has been undertaken to move investors to a single KYC platform.

Before this, investors were required to complete KYC formalities with multiple agencies for various financial products. All the records will now be stored digital ly, which will helps intuitions remove duplicate data. It also helps institutions find out if the client is KYC compliant.

What does a first-time investor in mutual funds have to do?

An investor now has to fill the new CKYC form before investing in mutual funds. Along with the form, he has to submit a self-attested copy of his PAN card, and identity and address proofs, such as passport and Aadhaar card. The new form has an extra field for the name of the applicant’s mother. Once the new form is processed by the registrar, a 14-digit KYC Identification Number (KIN) will be issued by CKYC, which can be used to invest in all financial products including mutual funds.

How can CKYC be done?
Along with the CKYC form, photocopies of documents have to be physically verified and attested, and an in-person verification of the investor has to be done. CKYC can be done through a mutual fund distributor, or the investor will have to visit the office of a mutual fund or a registrar. In case of NRI applicants, a person is authorised to attest the documents, and he may also conduct the in-person verification and confirm this in the KYC form ..

Do existing mutual fund investors have to do anything?
As of now, existing investors in mutual funds who are KYC compliant can continue investing in mutual funds. No updation is required from their end.