SEBI proposes stricter KYC rules for mutual funds
India’s securities regulator wants mutual fund companies to complete investor verification before accepting money. The Securities and Exchange Board of India released plans requiring full identity checks through authorized agencies before any transactions can proceed.
Asset managers must send documents to registration agencies for approval and wait for confirmation before investors can deposit funds. Investors will receive updates at each stage through registered contact details. The regulator accepts feedback through Nov. 14.
Incomplete paperwork blocks investors from withdrawing funds and receiving dividends under current practices. The board recently mandated that fund houses deploy funds from new offerings within 30 days or face penalty-free exits. Risk disclosures must reach clients by mid-month rather than at month’s end.
