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
- 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
- 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
- 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
firstname.lastname@example.org. You may also visit our website at www.principalindia.com for more details.
Please click here to download the KYC documents
for more information.