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This is with Reference to the AMFI letter: 35P/ MEM-COR/ 13/ 10-11, dated August 27, 2010 on the Introduction to Know Your Distributor (KYD) process for Mutual Fund Distributors, attached is the circular of KYD Process for Mutual Fund Distributor.
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| FAQS |
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| What is KYD |
| What are the KYD requirements for a Mutual Fund Distributor |
| What is a KYD Application Form? |
| Should the Distributor visit the CAMS PoS personally to obtain KYD Compliance? |
| Where and how does one get to be KYD Compliant? Does the Distributor have to repeat the KYD process with every Mutual Fund? |
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What is KYD
As Per AMFI letter: 35P/ MEM-COR/ 13/ 10-11, dated August 27, 2010 on the Introduction to Know Your Distributor (KYD) process for Mutual Fund Distributors, there are increasing numbers of instances of financial frauds played on the investors by Mutual Fund distributors/ their employees. On detecting such frauds/ on reporting of such frauds by AMCs, AMFI has initiated penal actions against such distributors including suspension of their ARN, advising all the AMCS to suspend payment of commission, trail commission, incentives, etc. As one of the measures to control this situation, Securities and Exchange Board of India (SEBI) has advised AMFI to tighten the procedure for Distributor Registration. On reviewing the current procedure for registration of distributors, it was decided by the Board to introduce a more stringent Know Your Distributor (KYD) process involving obtaining relevant documents and validation of such documents, personal verification and bio-metrics.
What are the KYD requirements for a Mutual Fund Distributor?
Individual & Senior Citizens Distributor will have to produce his Proof of Identity and Proof of Address.
List of Documents admissible as Proof of Identity and Proof of Address:
| KYD Documents required to be submitted |
| Documents for Identity Proof |
Documents for address proof (any one of the following) |
| Photo PAN Card (Mandatory) |
- Ration Card (Vernacular language)
- Passport
- Latest Demat/ Bank Account Statement **
- Voter Identity Card
- Latest Utility (Electricity / Municipal tax/ Water-tax/ Land Line Telephone) Bill*
- Driving License
- Lease / Sale Agreement of Residence
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Non –Individual Investors will have to produce certain documents pertaining to its constitution/registration to fulfill the KYC process.
List of Mandatory Documents to be submitted –
| Category of ARN holder |
KYD Documents required to be submitted |
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Documents for Identity Proof |
Documents for address proof (any one of the following) |
| Proprietary Concern |
- PAN card of the Concern (if available) or
- Photo PAN card of the Proprietor
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If the address of the proprietary concern and the proprietor is same, the following documents in the name of proprietor :
- Ration Card (Vernacular language)
- Passport
- Latest Demat / Bank Account Statement **
- Voter Identity Card
- Latest Utility (Electricity/ Municipal tax/ Water-tax/ Land Line Telephone) Bill*
- Driving License
- Lease / Sale Agreement of Residence
In case location of concern is different, then the following documents in the name of proprietary concern:
- Latest Bank Account Statement **
- Latest Utility (Electricity/ Municipal tax/ Water-tax/ Land Line Telephone) Bill *
- Lease/ Sale Agreement of office
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| HUF |
PAN card of HUF |
If the address of the HUF and the Karta of HUF are same, the following documents in the name of Karta:
- Ration Card (Vernacular language)
- Passport
- Latest Demat/ Bank Account Statement **
- Voter Identity Card
- Latest Utility (Electricity/ Municipal tax/ Water-tax/ Land Line Telephone) Bill *
- Driving License
- Lease / Sale Agreement of Residence
In case location of HUF is different, then the following documents in the name of HUF:
- Latest Bank Account Statement **
- Latest Utility (Electricity/ Municipal tax/ Water-tax/ Land Line Telephone) Bill *
- Lease / Sale Agreement of Office
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| Partnership Firm/ Societies/ Trust |
PAN card of Firm |
- Latest Utility (Electricity/ Municipal tax/ Water-tax/ Landline Telephone) bill *
- Lease / Sale Agreement
- Latest Bank Account Statement / Bank Passbook **
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| Corporates (Pvt./ Public Ltd. Co., Banks, NBFC) |
PAN card of the corporate entity |
- Latest Utility (Electricity/Municipal tax/ Water-tax/ Landline /Telephone) bill *
- Lease / Sale Agreement
- Latest Bank Account Statement / Bank Passbook **
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* Not more than 2 Months old.
** Where bank account statement is submitted as a proof of address, the said bank account should have been opened at least six months prior to the submission of application and the statement should not be more than 2 months old.
What is a KYD Application Form
A KYD Application Form has been designed for Individual and Non-Individual Distributors separately. The soft copy of these KYD forms will be made available on the website of all mutual funds, AMFI and Central Depository Services India Limited (CDSL).
Should the Distributor visit the CAMS PoS personally to obtain KYD Compliance?
Yes. The distributors are required to produce, in person, the original documents for over the counter verification at the time of submission of their applications along with self attested photocopies of the same.
Where and how does one get to be KYD Compliant? Does the Distributor have to repeat the KYD process with every Mutual Fund?
Following is the process to be followed by the Distributor, to be a KYD Compliant:
A. Document Verification:
The distributors will have to submit their applications for registration with AMFI, along with the KYD application form and self attested photocopies of relevant documents as mentioned against their respective category in the Tables 1A & 1B mentioned above. AMFI has engaged the services of Computer Age Management Services Ltd. (CAMS) to carry out the KYD process through their centre’s in 60 locations initially, (hereinafter referred to as “CAMS Point of service” / “CAMS POS”). KYD application along with the requisite documents could be submitted at any of the CAMS POS, a list of which is available at www.amfiindia.com or www.camsonline.com. The distributors are required to produce, in person, the original documents for over the counter verification at the time of submission of their applications along with self attested photocopies of the same.
B. Bio-metric:
The Bio-metric process involves taking impression of right hand index finger and registering the same for identification purpose. The said process will be carried out at the CAMS POS, at the time of submission of applications for registration or renewal of ARN along with KYD application form.
- Individual and Senior Citizen Category Distributors are required to visit in person for Biometric registration.
- In case of non individual entities, bio-metric is required to be carried out for the authorised persons/ officials as indicated in the below mentioned table:-
| Category of ARN holder |
Persons required to undergo bio-metric process |
| Proprietary Concern |
Proprietor |
| Partnership firm |
All the Partners |
| HUF |
Karta of HUF and the signatory to the application (if the signatory is a person other than the Karta). |
| Societies & Trust |
Principal Officer/Chief Trustee and the signatory to the application (if the signatory is a person other than these officials). |
| Corporates (Pvt./ Public Ltd. Co., Banks, NBFC) |
Authorized official who has signed ARN application |
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In case of non individual entities, the persons who are required to undertake bio-metric process as indicated in the above table are also required to comply with the document verification process by submitting the required documents i.e. proof of identity and proof of address as applicable to individual applicants.
No. Distributor don’t have to repeat the KYD process for every Mutual Fund
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