Not linked PAN with your mutual fund folio? You will not be able to carry investments from April 2023

Market regulator Sebi earlier mandated PAN as the sole identification for all the transactions in the securities market irrespective of the amount of transaction with effect from July 02, 2007. It provided an exemption from requirement of PAN for micro financial products (i.e., investments up

to Rs 50,000 per MF per year) and for investors residing in the state of Sikkim. Such investors are required to provide alternate proof of identity in lieu of PAN for KYC purposes and are allotted PAN-exempt KYC Reference Number

(PEKRN).

In this regard, AMFI said that it has been decided by Sebi now that no investments (Systematic transaction, lumpsum, redemption) shall be permitted in such folios wherein PAN/PEKRN details are not available.

"All necessary steps shall be taken to populate such folios with PAN or PEKRN (as may be applicable) before March 31, 2023 by obtaining it from the concerned unitholders. Thereafter, such non-compliant Non-PAN and Non-PEKRN folios will be liable to be frozen from April 01, 2023. Non-investor-initiated transactions such as dividend pay-out, if any, declared by the mutual fund schemes shall also be disallowed," it said.

For the same, AMCs will send the intimation to the concerned unitholders that such payment is due and shall be made electronically only upon complying with the PAN/PEKRN requirements.

Investors who have not updated their PAN details can do so by either logging in to their mutual fund portal/RTA or visiting the nearest mutual fund’s office where they can submit the PAN details along with a photocopy of the PAN card.