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SEBI eases Aadhaar-PAN KYC rules for mutual fund investors. Details here

News Agencies

Mumbai: In a major relief for mutual fund investors, the Securities and Exchange Board of India (Sebi) has removed the requirement to link the Permanent Account Number (PAN) with Aadhaar to obtain “KYC-registered” status for mutual fund transactions.

Old rules:

– Investors had to link their PAN with Aadhaar to complete the KYC process.

– Without this link, the KYC process would be put on hold.
New rules:
– As of 14 May, Sebi no longer requires PAN and Aadhaar to be linked for an investor to receive “KYC-registered” status.

– Investors can obtain “KYC-registered” status by completing KYC with other Officially Valid Documents (OVDs) such as Aadhaar, passport, driving licence, or voter ID card.

– To obtain “KYC-validated” status, however, PAN and Aadhaar still need to be linked.
In October 2023, Sebi mandated that all mutual fund investors link their PAN with Aadhaar to complete the KYC process by March 31, 2024. If PAN and Aadhaar were not linked, the KYC process would be put on hold, preventing any investment activity. Additionally, KYC could be completed using a bank passbook or account statement as proof of address.

However, these changes led to the temporary suspension of numerous mutual fund accounts. The issue reportedly affected over 13 million accounts where KYC updates were incomplete.

Now, in a revised circular issued on May 14, Sebi has eased these requirements. Investors no longer need to link their PAN with Aadhaar to obtain “KYC-registered” status. This can be achieved by completing KYC with other Officially Valid Documents (OVDs) such as Aadhaar, passport, driving licence, or voter ID card.
For “KYC-validated” status, linking PAN and Aadhaar remains a necessity. This status signifies that the investor’s KYC is based on Aadhaar, with both their mobile number and email ID validated by the KYC Registration Agency (KRA).

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