Regulatory Validations as per SEBI Circulars
Updated: May 10
According to latest SEBI Mutual Fund Circulars, all investors must comply with the following regulations:
SEBI Mutual Fund Circulars
1. Mandatory 2-factor authentication for all subscription and withdrawal transactions:
All transactions from here on need to be authenticated with the investors' primary mobile/email as per their registered data before proceeding
To comply with this SEBI Mutual Fund Circulars regulation, the following modifications will become effective from the respective dates:
a. An OTP verification will precede each purchase or redemption transaction conducted through the client app based on the registered mobile number and email - 27th March 2023
b. All client approval links will have an extra OTP verification step on the approval page - 1st April, 2023
c. All transactions done through NEFT/RTGS and Cheque as a payment method will require an OTP authentication before the order is placed - 1st April, 2023
Following March 31, 2023, no account whose primary mobile/email declarations are pending will be able to execute transactions
To comply with this SEBI Mutual Fund Circulars regulation following change has been implemented for all clients:
All clients whose regulatory validation is pending will get a mandatory popup on opening the app, where they must enter the relevant details before proceeding. Any action or transaction on the app won't be possible until that information is given.
Any transaction or approval link initiated from the partner dashboard/app would not proceed until the regulatory validation is completed for the client, IFAs will have the option to resend validation link when that error comes
IFAs can visit Reports->Business Reports-> Regulatory Validation Report to view list of clients pending regulatory validation. They can send a validation link to clients right away from this reports section if required.
3. Updation of nominee:
Following Sep 30, 2023, accounts whose nominee declarations are pending will no longer be authorised to execute redemption transactions. Moreover, any folio which does not have nomination declaration, after 30 Sep, shall be frozen for debits/redemption (including any switch transactions or STP/SWP)
IFAs can view the list of clients whose nomination is pending on Reports -> Business Reports -> Nomination Pending Report
For more details on how to update nominee, refer to this article
4. KYC Revalidation:
KYC done using Aadhaar Card as an OVD (Officially valid document) before 1st Nov, 2022, needs be revalidated by 30th April 2023; failure to do so will result in KYC being placed on hold which would only be able to get revalidated using the offline method
5. PAN-Aadhar Link:
As per the Central board of direct taxes (CBDT), any investor who does not have their PAN linked with Aadhar by 30th June 2023 will have their PAN become inoperative. There could be securities and other transactions restrictions until the PAN and Aadhaar are linked.
Moreover, KYC may be put on hold as well which will only be able to re-activate through offline mode.
To view list of clients who haven't linked their PAN with Aadhaar, IFAs can navigate to Reports -> Business Reports -> PAN-Aadhaar Link Report
For detailed FAQs, and process to link PAN with Aadhar, refer to this LINK