Commonly known as KYC, it is a term used by mutual funds, banks, insurance companies, etc. to recognize customers. The market regulator Securities and Exchange Board of India (SEBI) has approved such conditions for KYC standards in the case of mutual funds.
This is in the form of identity verification, email, financial status information, occupation and other demographic information being given. An investor must comply with KYC in order to invest in a mutual fund registered with SEBI. Investors can access KYC forms from mutual fund websites, CDSL Ventures Limited (CVL) and the Indian Mutual Funds Association (AMFI). Investors must provide proof of identity such as a copy of the PAN (permanent account number), passport copy, copy of the driving license, etc., and proof of address.
KYC means the process prescribed by SEBI to recognise and verify the identity of customers by means of proof of address, identity card and compliance with the laws, regulations, guidelines and circulars provided from time to time by the SEBI Board or any other Money Laundering Prevention Authority.
These are SEBI-registered organizations that keep records of investors on behalf of providers of capital market services. It removes the need to keep repeating KYC procedures for the same customer over and over again for different service providers.