SEBI proposes new KYC rule for mutual fund investments
SEBI is planning a new rule: from now on, you'll need to finish your full Know Your Customer (KYC) check—verified by an official KYC Registration Agency—before putting money into any new mutual fund folio.
This is meant to stop the headaches caused when investments are approved too soon, which can mess up payouts and redemptions.
What's the new process?
First, Asset Management Companies (AMCs) will do an initial KYC check and send your info to the KRA for final approval. Only after that green light can you invest.
Plus, you'll get updates about your KYC status by email and text, so there's less confusion and smoother transactions.
What to expect next?
There might be a small wait—AMC checks usually take 1-2 days and KRA approval adds another 2-3.
SEBI wants public feedback on these changes until November 14, 2025.
If it all goes through, everyone involved will need to update their systems for this new process.