KYC - NEW FORMALITY REQUIREMENT

Effective February 1, 2008, mutual fund investing would not be that simple for those who wish to invest Rs 50,000 and above. This is subsequent to the guidelines issued by the Securities and Exchange Board of India (SEBI) and Association of Mutual Funds in India (AMFI) relating to the requirements of the Prevention of Money Laundering Act, 2002. As per the new rule all mutual funds are now required to verify the identity and maintain records of all their investors through the mandated Know Your Customer (KYC) process effective today.

KYC formalities are required to be completed for all unit holders, including power of attorney holders and guardians, for any investment (new/additional purchase/new SIP) of Rs 50,000 and above.For the convenience of investors, all mutual funds have made special arrangements with CDSL Ventures Ltd. (CVL). The investors can download the form from the AMFI website and submit the same with the following required documents at designated centres.
Required Documents
• PAN Card • Proof of Identity • Proof of Address • Passport Size Photograph

(You can refer to the AMFI website for details of list of documents and designated centers for submission of the same)Investors should note that they need to carry original documents for verification along with a copy each to be presented. To make the process simpler, investors also have the option of providing an attested copy (attested by Notary Public/Gazetted Officer/Manager of a Scheduled Commercial Bank) of the relevant documents. This is a one time process and investors will be issued an acknowledgement when they submit the form. The copy of acknowledgement receipt alongwoth mutual fund application will be a mandatory requirement for investment of above Rs 50,000.Earlier AMFI had started issuing MIN (Mutual Fund Identification Number) to make the investing process 'transparent and easier'. Subsequently MIN was withdrawn and PAN was declared as the sole identification number for investing in funds. Though this facility (of KYC) is being provided free of cost to the investors, it is certainly not going to be as easy as it seems.

Indian Stocks - Bears on a Roll

Monday began with the Sensex tumbling by 7.4%, the most in almost four years. All 30 Sensex stocks declined exacerbated by a sell-off from local investors as fears of the US entering a recession affected markets across the globe. European, Latin American and Asian markets across the globe tumbled. Commodities were hit and sugar and cement fell sharply. The BSE Metal index was down 13.3%. BSE Realty index (down 12.8%), BSE Oil & Gas index (down 11.9%) and BSE Power index (down 10.9%) also fell. Mid-caps were not spared and the BSE Mid-Cap index was down 11.3%. About 138 stocks advanced on the BSE, while 2,658 stocks declined and 13 stocks remained unchanged.
Tuesday was no better with the Sensex falling by 5%. Commodity prices too tumbled and Asian markets fell. The BSE and NSE halted trading for an hour.The US market was shut on Monday because of Martin Luther King Jr. Day (a holiday). On Tuesday, the US markets tumbled soon after opening and the Federal Reserve implemented a rate cut.This helped the Indian market pick up the next day.On Wednesday, the Indian market snapped a 7-day slide. All 13 industry indices posted gains. The market initially rallied only to turn choppy but closed positively.Despite the rally on Wednesday and starting off Thursday well, the bulls fell as the market wiped off all early gains. The market was extremely volatile gyrating almost 1,000 points between its days high and low. Weak cues from the Asian markets did not help. French bank Societe Generale SA made a statement that they were seeking fresh capital because of a record trading loss, added to bad global sentiment and the $120 billion of write-downs and losses reported by financial firms across the globe.On Friday, the bulls were back with a vengeance. Friday started with a bang with a lot of activity. Banking, power and realty stocks were the star performers. All Sensex and Nifty stocks closed in the green. BSE Bankex, BSE Capital Goods, BSE Auto, BSE Metal, BSE FMCG, BSE Oil & Gas and BSE IT all closed higher. Small caps too rose but mid-caps rose higher. BSE Midcap and BSE Small Cap closed higher.