Podcast
Questions and Answers
Which document is mandatory for medium and high-risk investors during the KYC process?
Which document is mandatory for medium and high-risk investors during the KYC process?
What must be established for investors classified in the high-risk category?
What must be established for investors classified in the high-risk category?
Which of the following is NOT a requirement when completing KYC through Aadhaar authentication?
Which of the following is NOT a requirement when completing KYC through Aadhaar authentication?
What does the VIPV process include during the verification of an investor?
What does the VIPV process include during the verification of an investor?
Signup and view all the answers
What should the VIPV video of the investor ensure regarding their appearance?
What should the VIPV video of the investor ensure regarding their appearance?
Signup and view all the answers
What is the purpose of retaining photographic evidence during the VIPV process?
What is the purpose of retaining photographic evidence during the VIPV process?
Signup and view all the answers
What does the Points of Presence Service Providers (POP-SP) do during the NPS KYC process?
What does the Points of Presence Service Providers (POP-SP) do during the NPS KYC process?
Signup and view all the answers
What storage requirement is specified for the VIPV process?
What storage requirement is specified for the VIPV process?
Signup and view all the answers
What is the role of the transaction slip in mutual fund investments?
What is the role of the transaction slip in mutual fund investments?
Signup and view all the answers
Which document is required for applying for a Permanent Account Number (PAN)?
Which document is required for applying for a Permanent Account Number (PAN)?
Signup and view all the answers
When making additional investments in mutual funds, which requirement is NOT needed?
When making additional investments in mutual funds, which requirement is NOT needed?
Signup and view all the answers
How can investors hold their mutual fund and stock market investments?
How can investors hold their mutual fund and stock market investments?
Signup and view all the answers
Which organization is NOT involved in handling the PAN application process?
Which organization is NOT involved in handling the PAN application process?
Signup and view all the answers
What is a mandatory requirement for most investors in financial products in India?
What is a mandatory requirement for most investors in financial products in India?
Signup and view all the answers
Which of the following may exclude specific categories of investors from participating in investment schemes?
Which of the following may exclude specific categories of investors from participating in investment schemes?
Signup and view all the answers
What must an investor provide when making periodic investments in their NPS account?
What must an investor provide when making periodic investments in their NPS account?
Signup and view all the answers
What is the purpose of Section 114 B of the Income Tax Rules?
What is the purpose of Section 114 B of the Income Tax Rules?
Signup and view all the answers
What is required to invest in products classified as medium and high risk?
What is required to invest in products classified as medium and high risk?
Signup and view all the answers
For additional investments under the same folio, which of the following is NOT necessary to provide?
For additional investments under the same folio, which of the following is NOT necessary to provide?
Signup and view all the answers
What type of investments require PAN details if the amount exceeds Rs. 50,000?
What type of investments require PAN details if the amount exceeds Rs. 50,000?
Signup and view all the answers
Which of the following statements about SEBI regulations is true?
Which of the following statements about SEBI regulations is true?
Signup and view all the answers
What specific age-related restriction is associated with pension plans of mutual funds?
What specific age-related restriction is associated with pension plans of mutual funds?
Signup and view all the answers
What does the term 'ASBA facility' refer to in the context of SEBI?
What does the term 'ASBA facility' refer to in the context of SEBI?
Signup and view all the answers
Which concept allows for the central recording of KYC documentation?
Which concept allows for the central recording of KYC documentation?
Signup and view all the answers
Study Notes
Operational Aspects of Investment Management
- Learning Objectives: Understand investors, the investing process, Demat/Remat, Power of Attorney, Non-Resident Investor (NRI) processes, various payment instruments, and documentation for financial advice.
Investors and the Investing Process
- Individual Investors: Resident, minors, Hindu Undivided Family (HUF), Non-Resident Indians (NRIs), and Foreign Portfolio Investors (FPIs) are all individual investors. These investors typically make smaller investments and are geographically spread
- Institutional Investors: Companies, trusts, charitable organizations, societies, financial institutions, portfolio investors, pension funds, insurance funds, and banks are included. These investors operate in a more formal process to make investment decisions. Decisions are authorized by the governing body like the board or trustees
Client Onboarding Process
- Investor Requirements: Investors must meet requirements for KYC compliance, specific to certain products as specified in the terms of offer.
- Specific Conditions: For instance, a public issue will have a set subscription period
- Mandatory Requirements: Need a Permanent Account Number (PAN) given by the Income Tax Authorities for most transactions
Regulatory Requirements
- PAN (Permanent Account Number): A mandatory requirement for most financial products to access services like banking, insurance, and financial products
- Capital Market Investments: PAN details required for demat and physical investments, deposits above a certain amount, and insurance premiums above a threshold
Mandatory Investor Information
- Investor Identifying Information: Names, addresses, bank/account numbers, and any information required by the financial product or service offered.
- Joint Holders: For some investments, multiple joint holders are permitted with a maximum number defined by the specific instrument.
- Signatures: Signatures are verified for every transaction. For multiple holders, all signatures must be properly documented.
KYC Compliance
- KYC: Mandatory step for investors to verify identity and address as per Prevention of Money Laundering Act (PMLA).
- KYC Verification: The KRA (KYC Registration Agency) or UIDAI (Unique Identification Authority of India) verifies identity and address details for investor’s investments in capital markets
Investor Folio or Account
- Folio/Account Number: Assigned at initial purchase or opening to maintain transaction history and investor identity.
- Customer Records: The investment product or service provider captures details for an investor record.
Dematerialisation and Re-materialisation of Securities
- Dematerialisation: Process of converting physical securities to electronic form using depository services (like NSDL or CDSL)
- Rematerialisation: The reverse process, converting electronic securities back to physical form
Power of Attorney (PoA)
- Grantor: The primary investor authorizing the actions
- Attorney: The individual who is authorized to conduct investments
Account Opening Process for Non-Residents
- Non-Resident Indian (NRI): A citizen or person of Indian origin not residing in India. An individual is considered a resident based on number of days in India during a specific time period.
- Repatriation of Funds: Repatriation rules vary depending on the source of funds used to invest in Indian exchanges, so its critical to understand whether funds originate from abroad, domestic currency, or other sources.
Payment Methods
- Local Cheques, Demand Drafts: Common methods for payments, but not every type of transaction allows for these modes
- Digital Payments: Options like NEFT/RTGS, electronic bank transfers, or payment apps are available
- ASBA (Application Supported by Blocked Amount): For primary market investments, funds are blocked in a bank account until allotment is confirmed
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Test your knowledge of KYC regulations, particularly for medium and high-risk investors. This quiz covers essential documents and processes required for compliance, including the VIPV process and the role of transaction slips in mutual funds. Ensure you understand the critical requirements for completing KYC in the financial context.
