Know Your Customer (KYC)

Know Your Client (KYC) requirement under Prevention of Money Laundering Act, 2002



SEBI had vide its circular dated October 5, 2011 notified Uniform KYC Form and supporting documents required to be used by all SEBI registered intermediaries (including Mutual Funds) for new client accounts. The uniform KYC requirement is effective from January 1, 2012.

In view of the above, the KYC form to be used by new investors for obtaining KYC compliance was modified. Accordingly, all new investors irrespective of their investment amount are required to adhere to the new KYC norms.

With a view to bringing about an uniformity in the KYC requirement and a mechanism for centralization of the KYC records in the securities market, SEBI has vide its various circulars viz. MIRSD/SE/Cir-21/2011 dated October 5, 2011, MIRSD/Cir-23/2011 dated December 2, 2011 and the SEBI (KYC Registration Agency) Regulations, 2011 mandated that an investor who deals with any of the SEBI registered entities, viz. Depository Participants (DPs), Mutual Funds, Portfolio Managers, etc. shall be required to fill the common KYC form and submit the same along with the specified documents at the account opening stage with any of the SEBI registered intermediaries ('Intermediary').

Revised Know Your Customer (KYC) compliance requirements w.e.f 1 December 2012:

SEBI has vide its circular no. MIRSD/Cir-5/2012 dated April 13, 2012 has advised investors to update information that is missing/not available and has now been made mandatory post introduction of Uniform KYC guidelines w.e.f January 1, 2012.

In view of the above, Investors are requested to note the following change:

Category of Investor

Classification

Status with the Fund

Revised Process

MF CVL KYC compliant investor (MF KYC prior to 1 January 2012)

Individual Investors

First time investment with HSBC Global Asset Management

KRA KYC acknowledgement for all holders including POA, guardian etc to be attached with the investment application.

To obtain KRA KYC compliance status, submit the following to update missing/not available information :

  • Completed KRA KYC change form (Section B)
  • Identity proof for IPV:

a) Self-attested copy of PAN card along with originals for verification

b) In case of PAN exempted category, the relevant self-attested copy of ID proof along with originals for verification

Non-Individual Investors

First time investment with HSBC Global Asset Management

Fresh KRA KYC to be mandatorily completed. Refer KRA KYC form for Non-individuals

  • Documents and information already submitted at the time of obtaining MF-CVL KYC compliance, need not be submitted again
  • Where information/documents already submitted, the investor should mention "Already submitted" on the form

Individual Investors / Non-Individual Investors

Existing Investors with HSBC Global Asset Management

No impact on subsequent transactions (or ongoing SIPs) of investors in their existing mutual fund folios/accounts which is KYC compliant under the erstwhile centralized KYC with CVL (CVLMF).

KRA KYC Compliance already obtained

Individual Investors / Non-Individual Investors

First time investment with HSBC Global Asset Management

KRA KYC acknowledgement for all holders including POA, guardian etc to be attached with the investment application

KYC compliance not obtained

Individual Investors / Non-Individual Investors

First time investment / Existing investor submitting investment or switch transaction (including systematic transactions)

Fresh KRA KYC to be mandatorily completed. Refer KRA KYC form for Individuals & Non-individuals respectively

All Individual & Non-individual investors already invested with the fund and have obtained KYC compliance prior to 1 January 2012, are urged to update the above information on KRA records by submitting the required documentation to the fund or its RTA.

Investors may download the Common KYC form here or approach any of the official point of acceptance of transactions.


Updation of details on KYC recorded with the KRA:

Any subsequent change to Address, Pin Code, Country, Nationality, Occupation, Income details, Date of Birth, Proof of Identity, etc. recorded with the intermediary and further registered with KRA’s will overwrite the records maintained with the AMC. The AMC/RTA reserves the right to refund the amount invested or reject transaction requests in case of any discrepancy noted in the information provided in the application.

To update/change information already recorded with the KRA, Individual investors are requested to download the KRA KYC Change form :

FAQs to assist:


What is the Effective Date for the new KYC form?

The new forms are applicable from January 01, 2012. All investors who have obtained old MF CVL KYC are requested to complete the KRA KYC formalities. The revised process outlined above is effective December 01, 2012.


What is new in these KRA KYC forms as compared to MF KYC applicable prior to January 01, 2012?

There are some salient changes in the KYC process, applicable forms and supporting documents, as listed below.

  1. For Individuals:
    1. Marital Status (mandatory)
    2. Unique Identification Number (UID)/Aadhaar (Non Mandatory)
    3. Modification in slabs for Gross Annual Income Details, or
    4. Individuals have the choice to mention their Net Worth as on a recent date in lieu of Gross Annual Income Details
  2. For Non - Individuals:
    1. Photograph of any one of the authorized signatories required on the form with signature across it
    2. Additional details like 'Place of Incorporation', 'Date of commencement of Business', 'Net Worth as on a recent date'
    3. Name, Photograph, PAN, Proof of Identity, Proof of Address of Karta/Partners/Trustees/Promoters (holding direct or indirect control)
    4. DIN/UID of Promoters/Partners/Karta/Whole Time Directors
    5. Copy of balance sheets for last two years; latest share holding pattern, etc.
  3. In-Person Verification (IPV) - Mandatory: SEBI vide circular number MIRSD/Cir-26/2011 dated December 23, 2011 has mandated IPV for all new clients other than Non-Individuals
    1. In case of mutual funds, the IPV can be performed by AMCs or AMFI/NISM certified distributors who have complied with KYD requirements
    2. Further, details like name of the person doing IPV, designation, organization name, signatures and date of IPV should be recorded on the KYC form at the time of IPV

Further, SEBI has mandated that In Person Verification (IPV) of clients be carried out by the Intermediaries through a process specified in this regard. The IPV shall be a one-time process and IPV carried out by a client with any of the intermediaries shall be relied upon by all the other Intermediaries with respect to the dealing of such client with such other Intermediaries. With respect to the Mutual Fund clients, IPV carried out by the Know Your Distributor (KYD) registered Distributors who hold valid certifications issued by the National Institute of Securities Market (NISM)/Association of Mutual Funds in India (AMFI) will be valid. For investors who deal under “Direct” broker code (without any distributor), the IPV conducted by Scheduled Commercial Banks can also be relied upon.


What is the minimum standard KYC information that has been prescribed by SEBI vide SEBI circular dated 5th October 2012, but was not prescribed earlier for Mutual Funds?

  • In case of Individuals : IPV was not mandated
  • In case of Non-Individuals: annexure requiring details of Promoters/Partners/Karta/Trustees and whole time directors along with IPV was not mandated

Therefore, to comply with the SEBI circular dated April 13, 2012 :

  • In case of Individuals, missing/not available details to be submitted as follows:
    1. Father’s/Spouse Name
    2. Marital Status
    3. Nationality
    4. Gross Annual Income or Net worth as on recent date
    5. In-Person Verification (IPV)
  • In case of Non Individuals, Investors are required to complete the KRA KYC formalities afresh due to significant and major changes in KYC requirements

Who all need to be KYC Compliant?

  • Any individual(s) or non-individual(s)
  • Guardian investing on behalf of minor
  • Constituted as Power of Attorney (PoA) holder(s), in case of investments through PoA
  • If an individual becomes an Investor due to an operation of law, e.g., minor attaining majority and transmission of units upon death of an investor; the claimant / person(s) entering the Register of unit holders of the Fund will be required to be KYC compliant before such transfer can take place

Is KYC required for all transactions?

All new clients who are not KYC compliant as on January 01, 2012 though any intermediary, (including joint holders, guardian, in case of minor unit holders and POA holders) are required to be KYC compliant as per the Uniform KYC process, to carry out the below types of transactions :

  • New/Additional Purchases
  • Switch Transactions
  • Fresh SIP Registrations and Renewals
  • STP Registrations

It is clarified that revised KYC norms are not applicable on existing SIP / STP registrations including those received till December 31, 2010 and dividend reinvestment transactions of any amount.

However, if a client has completed her KYC requirements through any SEBI registered intermediary including Depository Participants, Portfolio Managers or any other Mutual Fund, etc., the KYC carried out through such intermediary can be relied upon by the Mutual Fund and no fresh KYC will be required, provided the KYC details are in conformity with the details sought in the new Uniform KYC form prescribed by SEBI.


Is KYC required for existing investors?

If one is an existing client with any intermediary like Mutual Fund, Portfolio Manager, Depository Participant, etc., and is KYC compliant through such intermediary, no action is required to be taken, provided the KYC details are in conformity with the details sought in the new Uniform KYC form prescribed by SEBI.

For existing unit holders who are as on date not KYC compliant, one needs to be KYC compliant by filling the Common KYC form available on this page.


How can one get KYC compliant?

The KYC requirements can be completed by filling up the prescribed KYC form and submitting the same along with the other requisite details/proof (attested true copies of supporting documents relating to proof of identity and address or verification with the original) to the Mutual Fund/RTA. The Mutual Fund/RTA will upload the details on the KRA (KYC Registration Agency) system.

Any subsequent change to Address, Pin Code, Country, Nationality, Occupation, Income details, Date of birth, Proof of identity, may also be communicated to the Mutual Fund/RTA.


Steps to be followed:

  • Complete the Uniform KYC application form.(Photocopies of the application forms may also be used. Please read the instructions mentioned overleaf of the KYC form before filling it up)
  • Enclose with the form, attested true copies of the supporting documents relating to proof of identity and proof of address along with the originals of the same
  • Submit the above to the Mutual Fund/RTA for mutual fund transactions, or such intermediary with whom you are transacting

Exception to PAN based Common Standard KYC


The below type of investors will be exempt from PAN based KYC, however, such investors will be subject to the uniform KYC process w.e.f 1 January 2012.

  • In case of transactions undertaken on behalf of Central Government and/or State Government and by officials appointed by Courts e.g. Official liquidator, Court receiver, etc.
  • Investors residing in the state of Sikkim
  • UN entities/multilateral agencies exempt from paying taxes/filing tax returns in India
  • SIP of Mutual Funds up to INR. 50,000/- p.a. In case of institutional clients, namely, FIIs, MFs, VCFs, FVCIs, Scheduled Commercial Banks, Multilateral and Bilateral Development Financial Institutions, State Industrial Development Corporations, Insurance Companies registered with IRDA and Public Financial Institution as defined under section 4A of the Companies Act, 1956, Custodians shall verify the PAN card details with the original PAN card and provide duly certified copies of such verified PAN details to the intermediaries

Other important points:

All applications/transactions request are liable to be rejected if the KYC requirements as applicable on the date of investment are not complied with.

Investors/unit holders should further note that the above KYC norms may undergo changes from time-to-time. Hence, investors/unit holders are requested to apprise themselves about KYC applicability before submitting their applications/transactions to avoid rejections.

In case you need any additional information in this matter, please contact our Investor Service Centre or your distributor, or e-mail us at hsbcmf@hsbc.co.in.

We request your cooperation to ensure that your future investments are processed smoothly.