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SEBI Proposes Uniform KYC Rule Requiring KRA Clearance Before First Mutual Fund Investment

The consultation targets delays from sequential verification, with public comments due by November 14.

Overview

  • SEBI’s draft sets a standard process so new folios are fully KYC‑compliant at both the AMC and KRA levels before any investment proceeds.
  • First investments would be permitted only after a KYC Registration Agency verifies details and marks the folio compliant in its system.
  • Investors would receive real‑time updates on KYC status through registered email and mobile at each step of onboarding.
  • The proposal responds to transaction delays, communication gaps, and rising unclaimed dividends or redemptions caused by the current sequential checks.
  • AMCs, KRAs, and intermediaries are instructed to align and upgrade internal systems once the framework is finalized following the consultation.