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KYC Norms

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Know Your Customer Requirement

In terms of the Prevention of Money Laundering Act, 2002, the Rules issued there under and relevant guidelines/circulars issued by SEBI in this regard (Anti Money Laundering /AML Laws), all intermediaries, including Mutual Funds, have to formulate and implement a client identification programme, verify and maintain the record of identity and address(es) of investors ("Know Your Customer" norms).

SEBI with an intention to simplify KYC norms and make it more investor friendly and uniform across all SEBI registered Intermediary(ies) vide its Circular No. MIRSD/Cir-26/2011 dated December 23, 2011, SEBI KYC Registration Agency (KRA) Regulations, 2011 and SEBI Circular No. MIRSD/Cir-21/2011 dated October 5, 2011, has issued following guidelines for implementation of Uniform KYC, w.e.f. January 1, 2012 (Effective Date):-

 
  • Common KYC Application Form has been specified for all SEBI registered intermediaries viz. Mutual Funds, Portfolio Managers, Depository Participants, Stock Brokers, Venture Capital Funds, Collective Investment Schemes etc. All new Investors who are not KYC Compliant are required to use the Common KYC Application Form to apply for KYC process and are also required to mandatorily undergo In Person Verification (IPV) with any of SEBI registered Intermediaries including Mutual Funds;
  • With respect to Mutual Funds, IPV can be conducted by AMCs or by any Know Your Distributor (KYD) compliant Mutual Fund Distributor who holds AMFI / NISM certification. However, Investors are required to ensure that ARN on the Investment Application Form with Mutual Fund and details of the distributor in the related KYC form and IPV done need to be one and the same; For applications received directly by Mutual Fund, IPV carried out by Scheduled Commercial Banks, also shall be relied upon by the Mutual Fund;
  • In case of Investors who have completed the KYC process for investments in Mutual Funds (in Old Format) - such investors can continue to use the KYC acknowledgement letter for transacting in Mutual Fund Units. However, such KYC letter shall not be applicable for investments/opening of account with other intermediaries;
  • In case of new Investors who have not completed the KYC process for Investments in Mutual Fund Units - New KYC application norm as explained above along with IPV shall be applicable. Further, such KYC can be used for all investments / opening of accounts in securities market, including Mutual Funds; Further, such Investor who wishes to transact in schemes of Principal Mutual Fund, he/she is required to submit a duly completed and signed common KYC application form along with all necessary documents as mentioned in application form to Principal AMC. The AMC shall upload the details of such Investors on the system of the KYC Registration Agency (KRA). Registrar and Transfer Agents (RTA) of a Mutual Fund may also undertake the KYC of an investor on behalf of AMC. KRA shall send a letter to such Investors within 10 working days of the receipt of the initial/updated KYC documents from AMC, confirming the details thereof;
  • Investors upon completing new KYC procedure (including IPV) through any of the SEBI registered Intermediary will not be required to undergo KYC process again with such other SEBI registered Intermediaries, including Mutual Funds. However, Principal Mutual Fund and Principal AMC reserves the right to conduct fresh KYC of the Investors or undertake enhanced KYC measures commensurate with the risk profile of the Investor. The KYC compliance status will be validated with the records of the KRA before allotting units;
  • For the purpose of KYC compliance (i) Constituted Power of Attorney (PoA) holder, in case of investments through a PoA (ii) each of the applicants, in case of application in joint names (iii) Guardian in case of Minor, shall also comply with the KYC compliance requirements provided herein.

The aforesaid provisions shall be applicable in respect of all *investment transactions made on or after the Effective Date. Applications without KYC acknowledgement are liable to be rejected.

* Investment Transactions includes Fresh / Additional Purchases (Switches and Sweep), Systematic Investment Plans (SIPs) / Systematic Transfer Plans (STPs) registered from the effective date

The aforementioned KYC requirements shall also be applicable for transfer of units to Minors on attaining age of Majority age and transmission of units to nominees.

If you wish to know more about the KYC formalities/procedure, you can just walk into our nearest Investor Service Centre or call our toll free number 1800 425 5600 for any help and guidance. Alternatively you can email us your query at customer@principalindia.com. You may also visit our website at www.principalindia.com for more details.

Please click here to download the KYC documents for more information.


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