Paytm Mandates Investor KYC Compliance By July 25 For Mutual Fund SIPs

Paytm Money stated that “The last date to complete the mandatory steps on the Paytm Money app is July 25, 2022. In the event of non-compliance with SEBI regulations by July 25, 2022, future investments in funds Direct mutuals, including SIPs, will be terminated in accordance with our mandatory guidelines.”

Paytm Money alerted its users via mail saying that “in accordance with these SEBI regulations, investors on the BSE StAR platform must register with us as a brokerage client by opening a Demat account to continue investing in the SIPs. We would need a few details from you in addition to what you provided as part of your initial KYC on our platform and need to submit these to exchanges to upgrade your account to continue to be compliant. For your convenience, this whole process has been simplified and is 100% digital on the Paytm Money app. It is absolutely FREE of any charges. We assure you that it will not take you more than a few minutes to complete it.”

Here are the FAQs that Paytm Money mentioned on their mail statement.

1. Why do I need to update my KYC/Update my account?

Paytm Money offered direct execution and advisory services to mutual funds in accordance with SEBI regulations, which services could be offered either by an RIA or by a broker using an exchange platform. Following a regulatory change, we have decided to no longer offer advisory services and must cease using the RIA code and must use our brokerage code to execute direct mutual fund transactions. We are in the process of integrating with BSE StAR, the nation’s largest mutual fund execution platform, to continue to provide direct mutual fund services to our investors and remain regulatory compliant.

As BSE StAR is an exchange platform, it requires a UCC (Unique Client Code) to facilitate direct mutual fund transactions by mapping a client and trades. SEBI requires that these UCCs be mapped only to Demat accounts.

In accordance with these SEBI regulations, investors on the BSE StAR platform must register with us as a brokerage client by opening a Demat account to continue investing in SIPs. We would need a few details from you in addition to what you provided as part of your initial KYC on our platform and need to submit these to exchanges to upgrade your account to continue to be compliant.

For your convenience, this whole process has been simplified and is 100% digital on the Paytm Money app. It is absolutely FREE of any charges. We assure you that it will not take more than a few minutes to complete it.

As we take the next big step in scaling and improving the direct mutual fund experience for our investors, we are in the process of integrating with BSE StAR – the largest platform for execution of mutual funds of the country.

2. What do you need to do to stay compliant?

To continue to comply with SEBI regulations on Paytm Money and to be able to invest in your SIPs in the future, you must provide a few details in addition to what you have already submitted when completing your initial KYC with us and open a FREE Demat account.

a. Upload a clear image of your signature on white paper

b. Click a live photo via Paytm Money app

The process is 100% digital and won’t take more than a few minutes.

3. Is it mandatory?

Yes. As BSE StAR is an exchange platform, it requires a UCC (Unique Client Code) to facilitate direct mutual fund transactions by mapping a client and trades. SEBI requires that these UCCs be mapped only to Demat accounts. In accordance with these SEBI regulations, investors on the BSE StAR platform must register with us as a brokerage client by opening a Demat account to continue investing in SIPs.

4. What does it bring me?

Upon completion of this integration, you will have access to many more direct mutual fund programs, enhanced features, and a whole new direct mutual fund experience on the Paytm Money app. The BSE StAR platform has been scaled over the years to handle high volume transactions and is currently processing almost 2 Cr transactions per month and growing.

5. When do I need to complete this process?

The last date to complete the mandatory steps on the Paytm Money app is July 25, 2022. In the event of non-compliance with SEBI regulations by July 25, 2022, future investments in direct mutual funds, including including SIPs, will be terminated in accordance with our mandatory guidelines. It will only take a few minutes, we encourage you to act immediately.

6. Will I be charged for the Demat account?

Absolutely not. Opening an account is completely free and you will not be charged at any time during this account upgrade process. You will only be charged once you choose to add funds to your Demat account to complete a transaction. You can see all the fees related to trading on this blog.

7. How can I opt out of this process?

Since the onboarding process has no impact on your current direct mutual fund investments, we urge you not to lose the financial growth you have achieved with your diligence by investing each month.

If you still prefer to unsubscribe, you can submit a redemption request for your investments on our platform, which will be processed within 3 trading days. Alternatively, you can redeem the same directly from AMC or RTA.

8. What will happen to my investments if I don’t complete the steps?

If you fail to update your KYC by July 25, 2022, future investments in direct mutual funds, including SIPs and redemptions, will be stopped. You will still be able to access your portfolio and see the status of your investments to date. Any further action on your past investments will need to be initiated by you on the respective AMC website.

9. What if I want to start this process after July 25, 2022?

You can also choose to initiate this regulatory process after July 25, 2022, but until you do, your SIPs will be stopped and all other activity on your existing investments, such as redemption, will be restricted on the Paytm Money platform. . We encourage you to complete this process by July 25, 2022, so you don’t miss the growth streak you’ve achieved with your investments so far.

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Dolores W. Simon