Know what is a Common Account Number or CAN and if it is required for mutual fund investing
What is common account number (CAN) in mutual funds? What are its advantages/disadvantages? Is it mandatory for investors to apply for the same? - Dilip Sahi
A common account number (CAN) is a single account number issued on registering with MF Utilities. MF Utilities or MFU is a shared platform that acts as a transaction aggregation portal. In 2015, all the fund houses had come together to launch this portal with the main objective of bringing operational efficiency and convenience for investors and mutual fund distributors. This platform enabled the investment in direct plans of mutual funds which were introduced in the year 2013.
Earlier, investors investing across multiple fund houses had to deal with all of them separately. But after the launch of MFU in 2015, investors can get themselves registered in that portal and a common account number (CAN) is allotted. All the mutual fund investments of an investor across different fund houses are mapped to this number. MFU enables a unified view of all mutual fund investments for the investors. In addition, it also facilitates transactions like purchase, redemption and changing contact details across fund houses from the single platform and interface.
However, one must note that it is not mandatory to have a CAN or even invest through MFU. It is just one platform and an option for investors, among many others. A lot of online fintech platforms have emerged lately and MF Central is one of them. SEBI had directed the two biggest Registrar and Transfer Agents (RTAs) - CAMS and KFintech, to come together to create a unified hub exclusively for investors. MF Central maps all your investments and provides a unified view of your mutual fund investments. It also enables consolidating folios, initiating investments, and changing contact details, among many other facilities. MF Central is a one-stop solution for all your mutual fund needs.
But, to invest in mutual funds, it is necessary to be KYC compliant. It's a one-time, centralised exercise. You don't have to do it with each fund house separately. It's a simple process and requires submitting a copy of your PAN, photo, address proof along with some basic information about your income source. Besides seeking help from a mutual fund distributor for the same, one can now complete the KYC process online. Many fund houses have enabled that mechanism on their websites. Besides, many online platforms have also enabled it. Get your KYC done through CAMS.
Wondering whether you are already KYC complied or not? Know how to check your mutual fund KYC status.