Know Your Distributor (KYD)

Know Your Distributor (KYD) is a mandatory identity and integrity verification process that must be completed by all individuals and entities holding or applying for an AMFI Registration Number (ARN) in India. Administered by the Association of Mutual Funds in India (AMFI), KYD verifies the distributor’s identity, address, qualifications, and NISM certification status and creates a compliance record that is a precondition for commission payments from asset management companies (AMCs). An ARN holder who has not completed KYD, or whose KYD compliance has lapsed, is ineligible to receive commissions until compliance is restored.

Regulatory basis

KYD was introduced following SEBI’s direction in 2010 that AMFI implement a distributor-facing due-diligence framework analogous to the Know Your Customer (KYC) requirements applied to investors, but calibrated to intermediary risk. The framework aligns with India’s anti-money laundering (AML) obligations under the Prevention of Money Laundering Act, 2002 (PMLA), which require financial intermediaries and those who deal with them to maintain verified records of counter-party identity.

KYD documentation requirements

For individual ARN holders, KYD requires submission of:

• PAN card copy (mandatory);
• Aadhaar-based identity verification (OTP or biometric, see below);
• address proof (Aadhaar, voter ID, or passport);
• passport-size photograph;
• copy of valid NISM certification (NISM Series V-A or equivalent); and
• a signed declaration of compliance with the AMFI Code of Ethics and Best Practice Guidelines.

For body corporate ARN holders, KYD additionally requires:

• certificate of incorporation or registration;
• PAN of the entity;
• address proof of registered office;
• board resolution authorising ARN application; and
• KYD documents of the principal officer (the individual ARN holder designated to represent the entity).

Biometric KYD and the transition to digital verification

The original KYD process (2010-2022) required individual ARN holders to submit biometric fingerprint data at designated service points, typically at AMC branches, RTA offices, or AMFI-empanelled locations. This in-person biometric requirement was designed to create a non-repudiable identity record for each distributor.

In 2022, AMFI issued Circular 27 (see AMFI Circular 27), which discontinued the biometric fingerprint requirement for new ARN applications, replacing it with Aadhaar-based OTP verification or video-based KYD (V-KYD) as approved alternatives. This change reflected:

• the operational challenges of maintaining biometric service points nationwide, particularly in tier-3 and tier-4 cities;
• the growing reliability and regulatory acceptance of Aadhaar-based authentication under the UIDAI framework; and
• SEBI’s broader digital-first regulatory direction for intermediary onboarding.

Existing ARN holders whose biometric KYD was on file prior to the 2022 circular continue to be covered by their earlier compliance record until renewal, at which point they use the new digital verification process.

KYD service providers

AMFI has designated two registrar and transfer agents (RTAs) as KYD service providers:

• Computer Age Management Services (CAMS)
• KFin Technologies (formerly Karvy)

ARN applicants and renewal applicants complete KYD at service points or through online portals operated by these two RTAs. The KYD record is shared with AMFI, which updates the ARN holder’s compliance status on its central database.

Consequences of KYD non-compliance

• Commission suspension: AMCs are required by AMFI to stop commission payments to any ARN holder whose KYD compliance has lapsed or who has not completed KYD for a new ARN application.
• ARN block: AMFI may flag the ARN as non-compliant in its public database, alerting AMCs and investors to the distributor’s status.
• Reinstatement: An ARN holder can restore commission eligibility by completing the outstanding KYD steps. Commissions for the lapsed period are not paid retroactively.

See also

• AMFI Registration Number (ARN)
• Association of Mutual Funds in India (AMFI)
• AMFI Circular 27 – biometric discontinuation
• AMFI Code of Ethics
• NISM Series V-A Mutual Fund Distributors
• Employee Unique Identification Number (EUIN)
• Securities and Exchange Board of India (SEBI)

References

1. SEBI Circular SEBI/HO/IMD/DF2/CIR/P/2019/47. KYD framework update. March 2019.
2. AMFI Circular on KYD introduction. 2010.
3. AMFI Circular 27 on biometric discontinuation. 2022.
4. AMFI. “KYD service provider list and process guide.” amfiindia.com. Accessed 2026.