Mutual fund industry welcomes government's move on KYC norms

The mutual fund industry welcomed the government's move to have a common know your customer (KYC) norm for all kinds of financial product investors today, though they believe that there are certain issues which need to be sorted out.
"A common KYC will encourage more and more investors to invest in mutual funds as it will be very convenient for them to comply with the KYC requirement of the mutual fund industry," SBI Mutual Fund MD and CEO Dinesh Khara said.
Unlike opening a no-frills bank account, the mutual fund industry requires customers to produce a copy of PAN card if the investment is more than Rs 50,000.

"It's a welcome move by the government. Inter-operability between all financial entities across various financial regulators need to be worked out," Quantum AMC CEO Jimmy Patel said.
"So far, the Securities and Exchange Board of India (SEBI) is the only financial sector regulator which has come up with such a notification. We will have to wait for all the remaining three financial sector regulators to come up with similar notifications," mutual fund industry expert said on condition of anonymity.
A common KYC is something which is being implemented by all financial sector entities across all regulatory jurisdictions.
"Over and above, there will be certain core requirements for every regulatory jurisdiction. Whatever additional regulatory requirement need to be done, each regulator will be free to prescribe its own additional norms based on the risk assessment and risk profile of that sector," Pension Fund Regulatory and Development Authority's (PFRDA) Wholetime Member (Finance) and Officiating Chairman R V Verma said.

"All sectors will move towards a common KYC format. Efforts in that direction are already being made across all regulatory jurisdictions," Verma said.