After a long time, I'm back to CCI.
All mutual fund investors, whether new or existing, will have to provide additional Know Your Customer (KYC) details to their fund houses.
Here is a 10-point cheat-sheet:
1) In September this year, the Association of Mutual Funds of India (AMFI) came out with a circular directing mutual fund companies to collect additional information from new investors from November 1, 2015 to comply with norms of the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). The mutual fund body advised fund houses to make the additional KYC information mandatory for investors from January 1, 2016.
2) FATCA is an inter-governmental agreement signed between the US government and 50 countries including India where financial institutions dealing with US residents (green card holders or citizens) have to disclose the details of the income of their clients. This will help the US government curb tax evasion.
3) CRS is a similar reporting standard developed by G20 and the Organisation for Economic Cooperation Development (OECD) to tackle the problem of offshore tax evasion and stashing of unaccounted money abroad.
4) The additional KYC details a mutual fund investor has to provide under FATCA and CRS include gross annual income, net worth, occupation, source of wealth and country of birth.
5) If the investor is tax resident in any country other than India, the additional information required will include tax identification number and country of tax residency.
6) An investor can update the information both online and offline. For investments in more than one mutual fund, investors have the option to update the information online by visiting the respective website of the fund house.
7) The investor can also download the form and submit it on the point-of-services (POS) or the nearest office of the mutual fund house.
8) To avoid updating the KYC information with multiple fund houses, the investor can simply update it with the registrars. Both the mutual fund registrars, CAMS and Karvy - which record the transaction of the mutual fund investors - have sent emails to investors providing link to update the additional information online.
9) Investors can also submit the duly signed form at the nearest Karvy or CAMS office after downloading it from the registrar's website.
10) If mutual fund investor is serviced by a single registrar, they don't have to have to update the information with both the registrars. But in case they want to start a new investment in a mutual fund which is using services of the other registrar, they have to update the information with both registrars.