The new change was specified by SEBI last year in December. Earlier all the details like name, address, annual income, net worth and whether you are associated with politics were to be mentioned in the KYC forms only. Due to this the form was lengthy and the KYC registration agency (KRC) kept the form with itself.
SEBI felt the need to change the KYC form as income level and whether the investor is associated with politics are not required to be KYC compliant. Rather, income level details are required by the fund houses to ensure that the amount invested by the investor is consistent with the income level of the investor.
The fund houses need to know the income level of the investors as they are required to submit a suspicious transaction report to the Financial Intelligence Unit regularly where the data is needed. Financial Intelligence Unit does analysis and provides the information to other sectors relating to dubious financial transactions.
So, from now on the KYC form will be provided into two parts: Part I and part II. Part I will have the main portion and other details will be provided in Part II.
Income levels are now captured in Part II. So you have to provide your income level in Part II form.
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If you want to invest in a mutual fund then you have to fill two KYC forms that is Part I and Part II. Part I is the basic KYC details and Part II that captures your income level for fund houses.