SEBI: 1.3 crore mutual fund accounts with incomplete KYC frozen; Such mutual fund folios are being closed from April 1
SEBI has made the nominee rule optional for joint mutual fund accounts to promote ease of doing business. Also, the fund house has now received approval to have a single fund manager to oversee commodity and foreign investments.
Nearly 1.3 crore mutual accounts have been frozen by market regulator SEBI due to incomplete KYC. These account holders have submitted non-official valid documents in the form of KYC. According to KYC Registration Agencies (KRA), withdrawals from such accounts that do not have KYC or are incomplete have been frozen from April 1 this year. Many customers have submitted documents like electricity bills or bank accounts in the name of KYC. However, these documents are no longer being considered as KYC. It is necessary to link PAN and Aadhaar in mutual funds.
Approximately 7.9 crore of the 11 crore investors have valid KYC. Limited investment options are available to the 1.6 crore investors who fall under the KYC-registered category. Twelve percent of clients are unable to manage demat mutual fund accounts out of all accounts.
To facilitate business dealings, SEBI has made the nominee rule for joint mutual fund accounts optional. Furthermore, the fund house has been permitted to assign one fund manager to oversee investments in commodities and overseas assets. June 30, 2024, is the deadline for current individual mutual fund holders to submit nominations.
