The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing standardisation of the process for opening new mutual fund folios and execution of the first investment. The move aims to address operational and compliance issues arising from incomplete Know Your Customer (KYC) verification at the time of folio creation.

Under the proposal, new mutual fund folios would be allowed to make their first investment only after they are marked as KYC-compliant by a KYC Registration Agency (KRA). Currently, Asset Management Companies (AMCs) sometimes process investments immediately after conducting their internal KYC checks, even before the KRA completes verification.

This can lead to folios being marked as KYC non-compliant later if discrepancies are found, delayin

See Full Page