- Wealth PMS
AMFI has notified all mutual fund investors that as per enhanced KYC (Know Your Customer) norms, a new unique identification number will be issued to mutual fund investors. This number is called the Mutual fund Identification Number (MIN).
From January 1 2007, any investment in a mutual fund worth over Rs. 50,000 will need MIN information of the investors.
Does this apply to me?
If you are a mutual fund investor in Indian Mutual Funds, or will be at some time in the future, Yes. Currently it is only mandatory for investors that investAct now, because later when you really want to invest, the lack of a MIN will prove to be a pain.
This also applies if you are a company or a non-individual investor (like an HUF).
How do I get this MIN thing?
Note that if you don’t want to give the originals for over-the-counter verification, you can produce a certified true copy. Get a copy notarised by a registered notary, a commercial bank manager or a gazetted officer and submit that.
How much does it cost?
Nothing. It’s free for now. They might decide to charge later, so it’s in your interest to get your MIN immediately.
Do I have to do this again and again for every single fund?
No. MIN is a single identification number that works with all mutual funds as per AMFI.
Do Existing investors need to do something?
Nothing if you don’t plan to invest more than Rs. 50,000 in a fund after Jan 1, 2007. If you have an SIP that invests more than Rs. 50K per installment, you’ll need a MIN. I suggest you get a MIN anyway.
Why do I have to do this?
When I was a kid, my parents used to tell me “Don’t ask questions, just do it!”. But today it’s important to address the question of “Why?”. The Government of India is very worried about the fact that money laundering is becoming more and more prevalent. Converting “black” to “white” money without paying any tax is what many people want to do, but that is cheating the government.
What they want to do is to stop all avenues for this purpose. People have been using cunning strategies like investing in other people’s names, or using fake names and addresses to avoid the tax man. In order to curb this, the goverment expects all financial bodies to “know their customers” – meaning, they should have a photo identification, address proof etc.
But this is also an inconvenience to an honest tax paying investor. So, given that frauds happen with large amounts (typically much higher than Rs. 50,000) they have decided to limit the MIN requirements to only investments above Rs. 50,000. Unfortunately, people are even more cunning and I am sure they will try to invest Rs. 49,000 instead, to avoid the MIN measures – so I am definite that the requirement will soon apply to all investors. It is in your interest to get a MIN fast, and while it is free.
What about Non Resident Indians (NRIs)?
NRIs and Persons of Indian Origin (PIOs) can invest in Indian Mutual Funds. They also need a MIN. Now, how can you expect NRIs to submit original documents? And submit forms themselves?
Firstly, original documents are not needed. Get document copies signed by a notary in your country, including address proof in the country you are in. You’ll need the notary to sign and provide his seal on the document – only registered notaries will do.
To submit documents, have distributors in India submit on your behalf. Send the notarized copies PLUS the filled up form to your distributor and ask them to submit on your behalf. You don’t need to give a power of attorney or any letter for submission of documents – that can be done by anyone. Ask them to scan a copy of the MIN document you have received and mail it to you, apart from sending it back by post. If you need such support, let me know; I can find someone who’ll do this for you.
PIOs must provide a notarized copy of their PIO card as well. Remember to get back a copy of the acknowledged, filled up MIN form, because you will need to provide that along with your application for future investment in Indian mutual funds.
Okay, I’m still confused. What to do?
Read the FAQ, and if you’re still confused about something, leave me a comment.