PAN relief for MF investors

INVESTMENTS BELOW RS 50,000 IN MUTUAL FUNDS MAY NOT REQUIRE PAN

THE government is set to exempt an annual investment of Rs 50,000 or less by investors in units of mutual funds from the requirement of submitting details of their permanent account number (PAN) at the time of investment.
    According to officials privy to the development, only investments through monthly systematic investment plans (SIPs) will be exempt from the requirement of providing PAN details. PAN was introduced under the Prevention of Anti-Money Laundering Act (PMLA) and since all SIPs transactions are routed through electronic transfers from the investor's bank accounts, money laundering is not an issue. However, the ministry is still to clarify whether lump sum investment of the same amount will be exempt from mandatory submission of PAN. Says AP Kurian, chairman of industry body AMFI, "We are yet to get the official notification on this from the government."
    The new notification comes nearly 2 years after PAN card was made mandatory for all such investments on July 2, 2007. Says Dhirendra Kumar, CEO, Value Research Online, "This will democratize MF investment. There has to be some room at the bottom of the pyramid for people to invest meaningfully without having to prove that they aren't laundering anything. Nearly 100 crore Indians cannot invest in mainstream financial products because of lack of PAN." Adds Sanjay Sinha, CEO, DBS Chola Mutual Fund, "There is first stage of educating an investor about the product. And then if you tell him about PAN, he may get a little reluctant. If threshold is brought down, it broadens the base of potential investors."
    But while the PAN requirement may be eased, investors will soon have to undergo Know Your Client process while investing in MFs. ET reported this first on May 29, '09 and while raising concerns on MF industry at a conference in Mumbai on Thursday, Sebi chairman CB Bhave said, "KYC is not a difficulty, but a requirement in the interest of the investor and the industry as a whole."

SUBSCRIBE TO Free SMS Alerts on India Stock Markets
OR SEND SMS "ON WAY2TRADE  " TO 9870807070
|DisasterAwareness | Health | Insurance |  Forex| Commodities|

Earn decent money by receiving SMSes on your cell phone.  Free Signup!

Chat ways2invest wilint

Contact Me

Ways2Health YOGA FOR GREAT LEGS