Mutual Fund investing - Know Your Customer acknowledgement

Here's a simple way to check your KYC compliance

If you wish to invest in excess of 50,000/- in mutual fund (MF), you need to be Know Your Client (KYC) compliant. Download the form from www.amfiinidia.com and submit, along with relevant documents (refer the form to know more about it) at any of the 250 terminals across India. Get a list of such terminals from Amfi website. Within a week or 10 days, you will receive your KYC acknowledgement confirming your KYC compliance. Submit a carbon copy of this acknowledgement every time you invest in a MF, along with your MF application form. 

However, if you misplace your original acknowledgement of KYC, or wish to check the status of your KYC compliance if you have carried out the procedures long time back but aren't sure of that now, visit http://www.cvlindia.com/ and click on the link on the site's home page that says 'Inquiry on KYC'. Type your PAN card number and you will get your KYC acknowledgment. Take a printout and simply, submit this. This way of getting your KYC acknowledgment is only possible if you have originally submitted PAN card copy as one of the supporting documents. 

HOW TO BUY AN FMP?

Unlike regular open-ended or closed-end mutual fund (MF) schemes that are open in their 'New Fund Offer' (NFO) period for around 20 to 21 days - or sometimes even for a month - fixed maturity plans (FMP) are open for a few days only. Companies require money for their daily needs on a regular basis, hence they tap various sources like banks and MFs, regularly. Hence, to keep the money supply going, and at the same time to tap the prevailing high interest rates as soon as possible, FMPs are launched in quick succession. 

It is also rare that your agent will push FMPs to you because FMPs are low-margin products. Unlike equity funds where agents earn as much as 2.25 per cent front-end commission (and trailing fees of up to 0.50 per cent for as long as you stay invested), FMPs have a very low cost structure. MFs earn only upto 0.50 to 0.75 per cent or so from your FMP, out of which they have to pay agents commission. Online brokerages also sell FMPs selectively. Kotak bank (online broker) and www.icicidirect.com do not, to the best of my knowledge. www.sharekhan.com does; it has a special FMP section on its internet trading website.  

So how do you buy an FMP then?

It's best to keep checking with your broker. He gets information of all the on-going FMPs. You have to take the initiative, because FMPs come and go very quickly. He may not want to go out of his way to sell you FMPs, but if you take the initiative and ask him, there are more chances of you coming to know. 

Scout MF websites. All MFs have details and application forms of on-going FMPs on their websites. Download the forms, fill them up (make sure you write 'DIRECT' in the agent's code box on the top part of your application form) and visit your nearest MF's office or its registrar & transfer agents' and submit the form. To get a list of 'point of acceptance', check out your MF's websites. 

If you are investing more than Rs 50,000, make sure your KYC is done. Also, ensure that you carry a copy of your PAN card. If you can carry your original PAN card, better.