E-KYC using Aadhaar: Securities and Exchange Board of India (SEBI) has issued circular paving the way for e-KYC using Aadhaar authentication thus reducing the time and bringing convenience to the investors.
How to do KYC for mutual fund online: Completing the KYC formalities is compulsory to invest in mutual fund schemes in India. With the new SEBI rules in place, investing in mutual fund schemes will become easier now, especially for those looking to undergo KYC requirement for the first time. The Securities and Exchange Board of India (SEBI) has issued a circular, paving the way for e-KYC using Aadhaar authentication, thus reducing the time and bringing convenience to the investors. After the E-KYC SEBI circular, the on-boarding of investors in the Aadhaar-based KYC model is expected to help investors start investing in MFs with ease.
Those entities in the securities market which are allowed by the government will act as the KUA- KYC User Agency while the MF distributors will act as the sub KUA after registering themselves with the UIDAI. An MF distributor as a Sub KUA will also have to enter into an agreement with the KUA to complete the Aadhaar based KYC formalities.
As an investor, one may either complete the E-KYC mutual fund online by oneself or get assistance from the distributor as well.
The notification is yet to be notified by the government and once it happens and after the registration with UIDAI, the following process as set by SEBI for Aadhaar e-KYC of investors (resident) in the securities market may be adopted by the KUAs and sub-KUAs:
Online Portal based Investor (Resident)
Step 1: Investor visits portal of KUA or the SEBI registered intermediary which is also a Sub-KUA to open account/invest through an intermediary.
Step 2: For Aadhaar e-KYC, the investor is redirected to KUA portal. The investor enters the Aadhaar Number or Virtual Id and provides consent on KUA portal. Adequate controls shall be in place to ensure that Aadhaar Number is not stored anywhere by the Sub -KUA or KUA.
Step 3: Investor will receive OTP in the mobile number registered with Aadhaar. The investor enters the OTP sent by UIDAI on KUA portal for Aadhaar e-KYC.
Step 4: KUA will receive the e-KYC details from UIDAI upon successful Aadhaar authentication which will be further forwarded to Sub-KUA in encrypted format (using KUAs own encryption key) and will be displayed to the investor on portal.
Sharing of e-KYC data by the KUA with Sub-KUA may be allowed under Regulation 16(2) of Aadhaar (Authentication) Regulation, 2016. Sub-KUA shall clearly specify the name of the KUA and Sub-KUA, and details of sharing of data among KUA and Sub-KUA while capturing investor consent.
Step 5: Investor will fill the additional detail as required under KYC format.
Step 6: SEBI registered Intermediary will upload additional KYC details to the KUA
Assisted Investor (Resident)
Step 1: Investor approaches any of the SEBI Registered Entity/ Sub-KUAs i.e. Mutual Fund Distributors or appointed persons for e-KYC through Aadhaar.
Step 2: SEBI registered entities (Sub-KUAs)will perform e-KYC using registered / Whitelisted devices with KUAs.
Step 3: KUA will ensure that all devices and device operators of Sub-KUA are registered/whitelisted devices with KUA.
Step 4: Investor will enter Aadhaar No. or Virtual Id and provides consent on the registered device.
Step 5: Investor provides biometric on the registered device.
Step 6: SEBIregistered intermediary (Sub-KUA)fetches the e-KYC details through the KUA from UIDAI which will be displayed to the investor on the registered device.
Step 7: Investor will also provide additional detail as required.