MF (mutual fund) investors can now invest up to Rs 50,000 annually in a single mutual fund per year without a permanent account number (PAN).
Indian capital market regulator SEBI has decided to exempt the requirement of permanent account number (PAN) for investments {(Both lump sum & SIPs - systematic investment plans} up to Rs 50,000 per mutual fund, per year. Now, instead of PAN, investors can submit their voter identity card, passport or driving license for photo identification. The rule is applicable with immediate effect.
Earlier investors were allowed to invest up to a maximum of Rs. 50,000 per annum across all MFs and a PAN card was mandatory to comply with KYC (Know Your Customber).
According to SEBI communication dated 24th July addressed to AMFI(Association of Mutual Funds in India),
“Micro schemes such as SIPs of MFs, micro products of micro finance institutions, up to Rs 50,000 per year per investor shall be exempted from the requirement of PAN.
Such schemes may be operationalized with other standard specified identification instruments such as Voted ID Card, Government / Defence ID Card, card of reputed employer, driving license and passport.
As per the Ministry of Finance circular, investments in mutual fund schemes (including investments in SIPs) of up to Rs. 50,000 per investor per year per MF shall be exempted from the requirement of PAN,” .
Earlier, Mf investors were allowed to invest up to a ceiling of Rs. 50,000 across all AMCs (Asset Management Companies). Now technically you can invest Rs. 50,000 in each AMC. There are separate set of KYC guidelines for this rule.
These investments are now exempt from PAN. KYC is mandatory even now. However, small ticket size MF investors can invest without a PAN by submitting either their passport or driving license as a proof to comply with KYC.
Indian MF Industry experts said, ''Such a move will boost investments particularly from smaller cities. The move is likely to give a breather to MF advisors who have been complaining about the complexity of KYC requirements. For instance, a MF investor can invest Rs. 50,000 without a PAN card in each AMC. Technically, he or / she can invest Rs. 22 lakh across 44 AMCs.
Effective January 01, 2011 SEBI had made KYC mandatory for all investments irrespective of the ticket size. SEBI exempts PAN for MF investments up to 50,000; experts say this will boost industry.
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