Individual investors will have to produce their Proof of identity (Photo PAN card copy or PAN card copy) and Proof of Address (any valid documents listed in section B of the KYC Application Form for Individuals).Non–Individual Investors will have to produce Mandatory Certified documents (as per in section C of the KYC application form).

CDSL Ventures Limited (“CDSL”), is appointed by Association of Mutual Funds of India (AMFI) to carry out the KYC compliance procedure through its Points of Service (POS). It accepts KYC Application Forms, verifies documents and provides the KYC Acknowledgement slip.Owing to the centralisation of KYC, there is no need to repeat the KYC individually for each mutual fund. All you need to provide is the KYC acknowledgement slip.E-KYC based on the Aadhaar number can be done for investments of up to Rs. 50,000, each financial year.

KYC Application Forms are available on the website of mutual funds, AMFI and Central Depository Services (India) Limited (CVL). You may also approach your distributor for a form.

If you are not in a position to visit POS personally, the KYC Application Form along with the necessary documents can be sent through the distributor or representative, and obtain the KYC Acknowledgement through any of the POS.

With effect from January 1, 2011, anyone investing in mutual funds is required to complete the KYC process irrespective of amount.

Currently, all investors (Individuals or Non-Individuals) who wish to make an investment in a mutual fund scheme irrespective of amount, will be required to complete the KYC process. This would also apply to new Systematic Investment Plan (SIP) registrations on or after 1st January 2011, irrespective of amount. Please find the list of personnel who are required to be KYC compliant:

Joint Holders: Joint holders (including first, second and third if any) are required to be individually KYC compliant before they can invest with any Mutual Fund.

Minors: In the case the investments are made for a minor, the Guardian has to be KYC compliant and attach their KYC Acknowledgement while investing in the name of the minor. The minor, on reaching 18 years of age, should immediately apply for KYC compliance and intimate the concerned Mutual Fund(s), in order to be able to transact further in his/her own capacity.

Power of Attorney (POA) Holder: Investors desirous of investing through a POA must note that the KYC compliance requirements are mandatory for both the POA issuer (i.e., Investor) and the Attorney (i.e. the holder of POA), both of whom should be KYC compliant in their independent capacity and attach their respective KYC Acknowledgements while investing.

For transmission (in the case of death of the unit holder): If the deceased is the sole applicant, the claimant should submit his/her KYC Acknowledgement in the request along with the other relevant documents to effect the transmission in his/her favour.

You must attach their KYC Acknowledgement along with the Investment Application Form(s)/Transaction Slip(s) while investing for the first time in the A/C folio in a mutual fund. Applications Forms/Transaction Slips not accompanied by KYC Acknowledgement are liable to be rejected by the Mutual Fund. If you do not obtain a KYC Acknowledgement, you will not be able to invest in a mutual fund.

KYC norms are applicable to all investors. It is your best interests to obtain KYC Acknowledgement and submit it to the Mutual Fund to avoid any inconvenience in future.

You must attach your KYC Acknowledgement along with the Investment Application Form(s)/Transaction Slip(s) while investing for the first time in a Mutual Fund.

In the event of any KYC Application Form being found deficient for lack of information/insufficiency of mandatory documentation, further investments will not be permitted.

No. The KYC Acknowledgement will be registered against your folio and quoted in all your future account statements. The same will exist in perpetuity unless cancelled by CVL.

You can inform the Mutual Fund to update the KYC Acknowledgement against all the folios/accounts you have with it. However, each of the holders of these folios/accounts should be KYC Compliant.

KYC is done free of cost.

KYC forms are available on the website of all mutual funds, AMFI and Central Depository Services (India) Limited (CVL) (www.amfiindia.com and www.cvlindia.com respectively). You may also approach your distributor for a form. The duly completed form along with the necessary attested documents can be submitted at the POS or mailed to your representative or Distributor who can complete the KYC formalities on your behalf.

Yes. In addition to the certified true copy of the passport, certified true copy of your overseas address and permanent address will also be required. If any of the documents (including attestations/ certifications) towards proof of identity or address is in a foreign language, they have to be translated into English for submission. The documents can be attested, by the Consulate office or overseas branches of scheduled commercial banks registered in India.

The requirements applicable to an NRI will also apply to a PIO. However, you will need to submit a certified true copy of your PIO Card.

Upon attaining the age of majority (i.e., on completing 18 years of age), the minor must be KYC Compliant and have KYC Acknowledgement of his/her own.

You should intimate your change of Name/Address/Status/Signature, etc., to any convenient POS. You need to quote your PAN and submit the relevant proof. You should provide for at least 10 days for the change of details to take effect. The specified form can be obtained from the AMFI/Mutual Fund/CVL website.

No, it is not sufficient.

PAN is sufficient as proof of identity. However, the current requirement for KYC requires the mutual fund to verify identity, address as well as obtain further information about the investor.

As per PMLA, it is mandatory for Mutual Funds to obtain financial status details from its investors. It is for this reason that the Income details are sought. The information given by you in the KYC Application form will be treated in a confidential manner and used for regulatory purposes if called for.

Yes. If you find an increase/decrease in your income, which would effectively change the income bracket that you have declared in the KYC Application form; you should apply to any convenient POS in the specified form. No proof is needed.

Redemption request is given to the investor service centre while the change of address (if KYC process has been previously completed) has to be given to a POS. The change of address will be effected by CVL and informed to the Mutual Funds. As it will take 10 days for this process to be completed, the redemption transaction accompanied by a change of address request is likely to be processed without effecting the change of address request.

KYC Acknowledgement is a separate form. Time­stamping is not required on the KYC Acknowledgement.

Once you are KYC compliant, you will be required to intimate your KYC details to all the Mutual Funds with whom you have investments by quoting the folio numbers.

Scenario 1: If the MIN was obtained by submitting the PAN, the MIN Acknowledgement can be enclosed along with the Investment Application Form(s)/Transaction Slip(s) while investing for the first time in a Mutual Fund, as the PAN number will be stated on the said acknowledgement.

Scenario 2: If the MIN was obtained without submitting the PAN but with other proof identity documents, the investor needs to carry the PAN card in original and a copy for submission at the POS. For such cases, CVL will send out a communication to the respective investors requesting them to submit the PAN for KYC compliance.

How do I invest in a scheme of mutual funds?

Mutual funds generally advertise in print or digital media publishing the date of launch of the new schemes. You can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services. Post offices and banks also help in distribution of mutual funds schemes to the investors.

Can Non-Resident Indians invest in Mutual funds?

Yes, Non-Resident Indians can also invest in mutual funds. Necessary details in this respect are given in the offer documents of the schemes.

What is NAV?

The net asset value (NAV) is the market value of the fund's underlying securities. It is calculated at the end of the trading day. Any open-ended fund buy or sell order received on that day is traded based on the net asset value calculated at the end of the day. The NAV per units is such Net Asset Value divided by the number of outstanding units:

NAV = (Market Value of Assets ­ Liabilities) / Units Outstanding

What is the difference between open-ended and close-ended funds?

Open-ended funds can issue and redeem units any time during the life of the scheme. Close-ended funds cannot issue new units except through a bonus or rights issue. Hence, the unit capital of open ended funds can fluctuate daily. Further, new investors to an open-ended fund can join the scheme by directly applying to the mutual fund at applicable Net Asset Value­ related prices. In the case of close-ended schemes, new investors can buy units only from the secondary market.

What are dividends?

A mutual fund may receive a dividend or interest income from the securities it owns; it is required to pay out this income to its investors. Most open­-ended funds offer an option to purchase additional shares with the dividends.

How much should I invest in debt or equity oriented schemes?

You should take into account your risk taking capability, age factor, financial position, etc., before investing in mutual funds. The schemes invest in different type of securities as disclosed in the offer documents and offer different returns and risks. You may also consult financial experts before taking investment decisions.

How do I fill up the application form of a mutual fund scheme?

You must mention clearly your name, address, the number of units applied for, and any other information as required in the application form. You must give your bank account number so as to avoid any fraudulent encashment of any cheque/draft issued by the mutual fund at a later date for the purpose of dividend or repurchase.

What should I look for in an offer document?

The offer document contains critical information that is mandatory to be disclosed by the mutual fund. The application form for subscription to a scheme is an integral part of the offer document. Before investing in a scheme, you should carefully read the offer document thoroughly.

When will I get a statement of account after investing in a mutual fund?

Mutual funds are required to dispatch certificates or statements of accounts within six weeks from the date of closure of the initial subscription of the scheme. In the case of close­ ended schemes, the investors would get either a Demat account statement or unit certificates as these are traded in stock exchanges. In the case of open­-ended schemes, a statement of account is issued by the mutual fund within 30 days from the date of closure of initial public offer of the scheme.

How long will it take for transfer of units after purchase from stock markets in case of close­ ended schemes?

According to SEBI Regulations, transfer of units is required to be done within 30 days from the date of lodgement of certificates with the mutual fund.

As a unit holder, how much time will it take to receive dividends/repurchase proceeds?

A mutual fund is required to dispatch to the unitholders the dividend warrants within 30 days of the declaration of the dividend and the redemption or repurchase proceeds within 10 working days from the date of redemption or repurchase request made by the unitholder.In the case of failures to dispatch the redemption/repurchase proceeds within the stipulated time period, the Asset Management Company is liable to pay interest as specified by SEBI from time to time (15% at present).

Can a mutual fund change the nature of the scheme from the one specified in the offer document?

Yes. However, no change in the nature or terms of the scheme, known as fundamental attributes of the scheme, for e.g., structure, investment pattern, etc. can be carried out unless a written communication is sent to each unitholder and an advertisement is given in one English daily having nationwide circulation and in a newspaper published in the language of the region where the head office of the mutual fund is situated. The unitholders have the right to exit the scheme at the prevailing NAV without any exit load if they do not want to continue with the scheme. The mutual funds are also required to follow similar procedure while converting the scheme from close­-ended to open­-ended scheme and in the case of a change in sponsor.

How will an investor come to know about the changes, if any, which may occur in the mutual fund?

Mutual funds are required to inform of any material changes to their unitholders. Apart from it, many mutual funds send quarterly newsletters to their investors. New investors may be informed about the material changes by way of addendum to the offer document till the time offer document is revised and reprinted.

How to know the performance of a mutual fund scheme?

The performance of a scheme is reflected in its net asset value (NAV) which is disclosed on daily basis in case of open­-ended schemes and on weekly basis in case of close­-ended schemes. The NAVs of mutual funds are required to be published in newspapers and their respective websites. All mutual funds are also required to put their NAVs on the website of Association of Mutual Funds in India (AMFI) http://www.amfiindia.com/ and thus the investors can access NAV's of all mutual funds at one place.The mutual funds are also required to publish their performance in the form of half yearly results, which also include their returns/yields over a period of time. Investors can also look into other details like percentage of expenses of total assets as these have an effect on the yield and other useful information in the same half yearly format.The mutual funds are also required to send an annual report or abridged annual report to the unitholders at the end of the year.

How to know where the mutual fund scheme has invested money mobilised from the investors?

The mutual funds are required to disclose full portfolios of all of their schemes on a half-yearly basis in newspapers and digital media. The scheme portfolio shows investment made in each security type, their quantity, market value and % to NAV. These portfolio statements also required to disclose illiquid securities in the portfolio, the investment made in rated and unrated debt securities, non­performing assets (NPAs), etc. Some of the mutual funds send newsletters to the unitholders on a quarterly basis that also contain portfolios of the schemes.

Is there any difference between investing in a mutual fund and in an initial public offering (IPO) of a company?

Yes, there is a difference. IPOs of companies may open at lower or higher price than the issue price depending on market sentiment and perception of investors. However, in the case of mutual funds, the par value of the units may not rise or fall immediately after allotment. A mutual fund scheme takes some time to make an investment in securities. NAV of the scheme depends on the value of securities in which the funds have been deployed.

If schemes in the same category of different mutual funds are available, should I choose a scheme with lower NAV?

Some of the investors have the tendency to prefer a scheme that is available at lower NAV compared to the one available at higher NAV. Sometimes, they prefer a new scheme that is issuing units at Rs.10 whereas the existing schemes in the same category are available at much higher NAVs. Investors may please note that in the case of mutual funds schemes, lower or higher NAVs of similar type schemes of different mutual funds have no relevance. You should choose a scheme based on its merit considering performance track record of the mutual fund, service standards, professional management, etc.

How do I choose a scheme for investment from the number of schemes available?

As already mentioned, the investors must read the offer document of the mutual fund scheme very carefully. They may also look into the past track record of performance of the scheme or other schemes of the same mutual fund. They may also compare the performance of other schemes having similar investment objectives. Though past performance of a scheme is not an indicator of its future performance and good performance in the past may or may not be sustained in the future, this is one of the important factors for making an investment decision. It is highly advisable to seek the advice of experts.

Are the companies having names like "mutual benefit" the same as mutual funds schemes?

Investors should not assume some companies having the name "mutual benefit" as mutual funds. These companies do not come under the purview of SEBI.

Is the higher net worth of the sponsor a guarantee for better returns?

A higher net worth of the sponsor does not indicate that the scheme would give better returns or the sponsor would compensate in case the NAV falls.

Where can I look out for information on mutual funds?

You can also access the NAVs half yearly results and portfolios of all mutual funds at the website of Association of mutual funds in India (AMFI) www.amfiindia.com. Investors can log on to the website of SEBI http://www.sebi.gov.in and go to "Mutual Funds" section for information on SEBI regulations and guidelines, data on mutual funds, draft offer documents filed by mutual funds, addresses of mutual funds, etc. There are a number of other websites that give a lot of information of various schemes of mutual funds including yields over a period of time. Many newspapers also publish useful information on mutual funds on a daily and weekly basis. Investors may approach their agents and distributors to guide them in this regard.

If mutual fund scheme is wound up, what happens to money invested?

In the case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unit holders are entitled to receive a report on winding up from the mutual funds, which provides all the necessary details.