The Securities and Exchange Board of India (Sebi) has relaxed certain KYC rules so that non-resident investors (NRI) with "KYC Registered" status can continue to easily invest in new mutual fund schemes till April 30, 2025. The relaxation was given via an internal communication sent to KYC registration agencies (KRAs).

According to a spokesperson of CAMS, a KRA, Sebi in an internal communication to KRAs through an email dated May 14, 2024, said, "In view of non-availability of source validation of passport and in view of facilitation of Aadhaar to NRIs by UIDAI, the provision of portability of KYC records has been extended till April 30, 2025. This means that NRIs having "KYC Registered" status can continue to invest in mutual fund schemes (new or existing) till April 30, 2025, without providing any additional documents."

Earlier, as per Sebi's recently amended KYC rules, mutual fund investors with 'KYC registered' status were required to submit additional KYC documents when making new investments via a new folio in any Indian mutual fund.

Sebi has also allowed mutual fund investors to get the "KYC Registered" or "KYC Validated" status by validating either their mobile number or email ID instead of having to mandatorily validate both (mobile and email ID) earlier.

WHAT NRI MUTUAL FUND INVESTORS SHOULD DO NOW?

The new relaxation will make it easier for NRIs to invest in any mutual fund scheme irrespective of whether they have a folio or not, provided they have the KYC registered status.

So NRI investors should first check their KYC status before investing. This can be done on any of the 5 KRAs' websites. The five KRAs are:

a) CAMSKRA
b) CVLKRA
c) Karvy KRA
d) NDML KRA
e) NSEKRA

HOW NRIs CAN UPDATE KYC STATUS FOR MUTUAL FUND INVESTMENTS?

An NRI's KYC status may be "KYC Registered" or "KYC On-Hold". Some NRIs' status may be "KYC Validated". If status is "KYC validated", they can easily continue investing in any mutual fund house. If the status is "KYC Registered", then they can continue to invest with this status till April 30, 2025 without providing any additional documents.

CAMS says, "NRI investors having "KYC Registered" status should ensure that they have got the Aadhaar-based "KYC Validated" status to continue to easily invest in mutual fund schemes after April 30, 2025."

If the KYC status is on-hold, NRIs have to undergo the KYC process again.

CAMS says, "KRA website, on KYC enquiry using PAN, provides the information on reasons for "KYC On-hold". The NRI investor can update those details by undergoing the KYC process again. Currently, there is no online provision available for NRI investors to remediate KYC subject to limitations on using Aadhaar-based process within Indian geography. Hence, they are required to undergo the KYC process by submitting documents physically. Further, if the KYC is on-hold only for want of PAN-Aadhaar not linked, such KYC status is automatically being moved to registered."

While undergoing the KYC process offline, NRIs should ensure that either their mobile number or email ID is updated as well as validated in the KYC records. CAMS says, "Currently, overseas mobile numbers of NRI investors are not being validated by KRAs, hence, KYC cannot be 'On-hold' for this reason. However, KYC status can be 'KYC On-hold' if the email ID of an NRI investor is not getting validated."