ID card for MF investors

If you invest more than Rs50,000 in mutual funds at one go, you might need a special identification card. That's for starters. CNBC TV18 finds that eventually all mutual fund investors will need such IDs.

Previously mutual funds simply sought a copy of your PAN card. But from the first of November, the mutual fund industry will implement the "know your customer norms".

A P Kurien, chairman, Association of Mutual Funds of India (AMFI) said, "Every fund follows a uniform procedure, which is subservient to the law of the land, friendly to the investors and uniform across the industry."

AMFI will appoint a service provider to collect copies of documents like photo identifications, PAN cards and proof of residence from investors and verify them against originals.

It will then issue a unique number to an investor. The investor must quote this number in subsequent mutual-fund applications. The service provider will also maintain a system through which the information is accessible to registrars and mutual funds.

AMFI may soon sign up with CDSL and SHCIL, which will act as service providers to facilitate this process. This will be a one-time procedure for investors and acceptable to all fund houses in the industry.

AMFI plans to bring existing investors also under this system.

AP Kurien adds, "Once that gets accepted by the people and the system gets stabilised, we can go to the next chapter. For example, an SIP of over Rs 50000 a year will be covered."
AMFI has a Sebi approval of the system. It now remains to be seen whether investors will also approve.