The Hindu Business Line : Big MF investments fall for want of unique ID

There has been a drop in the number of applications for big ticket investments in mutual funds, from individual investors for want of MIN (Mutual Fund Identification Number). That may, however, change with distributors now reporting that more and more clients are rustling up the documents needed for applying for these unique identification numbers.

With MIN being made compulsory for investments above Rs 50,000, mutual funds these days are recording fewer transactions by investors who are in this category. The situation, say sources, will turn normal with the passage of time, especially with the realisation that larger allocations cannot be made unless MIN is quoted.

While no specific figures are available, fund houses claim that the situation is improving and more investors are turning to intermediaries for assistance. They also cite two factors that will strengthen the trend, prompting more investors to obtain MIN.

One, the number will be relevant for SIPs (systematic investment plans), including an SIP that may have been started before January 1. Two, it will apply to even joint holders.

"An investor, say, someone who has put in a lakh of rupees, need not do anything at the moment if he just maintains his exposure to the fund in question and not add Rs 50,000 or more to it," said a source aware of developments. Nevertheless, even such investors are being advised to secure their MINs.

The system of using the unique number, which has been effective from January 1, is being considered significant for a number of reasons. MIN, says Mr A.P. Kurian, Chairman of AMFI, will be required over and above other unique identities.

Such identities include PAN, which is issued for I-T purposes, and MAPIN, which is issued under SEBI (Central Database of Market Participants) Regulations, 2003. MAPIN, which has so far been issued by NSDL on behalf of the regulator, in fact is being revisited, with SEBI deciding to go in for a fresh set of agencies.

"MIN is significant in the context of KYC (Know Your Client). A mutual fund needs to identify its customers in an effective manner. This is a one-time number. If you have a MIN, it will be recorded with your folio. All your account statements will carry it in future", Mr Kurian said.

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