SEBI issues consultation paper on process of opening mutual fund folios
Published on 23/10/2025 03:55 PM
Capital market regulator SEBI has launched a consultation paper proposing a host of changes in the process of opening mutual fund portfolios. One of the key proposals are to allow the first investment into the portfolio only after it is fully KYC-compliant.
According to the proposed changes, asset management companies (AMCs) will send the KYC (know your customer) documents to the KYC registration agencies (KRAs) after creating the portfolios. KRAs will then mark the folio as compliant only after completing the full KYC verification.
As per the proposed changes, investors will receive updates at every KYC step through email and mobile.
KRAs are SEBI-registered bodies that act as central repositories for storing, validating and sharing KYC data across intermediaries, such as brokers, mutual funds, and fund managers.
It is also proposed that AMCs and KRAs will follow SEBI's master circular on KYC compliance, in order to enhance investor protection and transparency. AMCs and KRAs will be required to implement the circular once it takes effect.
The regulator has invited public comments on the proposals until November 14.