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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Fund Distribution and Channel Management Practices

Which of the following is a requirement for a mutual fund distributor regarding the Know Your Customer (KYC) process for a new investor?

An investor must be KYC compliant before investing in mutual funds, and the distributor should assist in completing KYC through a SEBI-registered KRA. KYC is not waived by amount, residency or use of a distributor.

  1. AThe investor must be KYC compliant before investing, and the distributor should help complete the KYC through a registered KRACorrect
  2. BKYC is needed only for investments above Rs 10 lakh
  3. CKYC is needed only for investors who are non-residents
  4. DKYC is optional if the investment is made through a distributor

Explanation

Investors must complete KYC before investing in mutual funds, usually via a SEBI-registered KYC Registration Agency (KRA). It applies irrespective of the amount or the channel used.

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