Life without a Common Account Number
Rohit wrote to me recently asking for advice on his mutual fund portfolio. He shared with me an excel sheet that he used to track his investments. It had the names of the funds, the folio numbers, in whose name the holding was, the broker who had facilitated the transaction, amount invested and units.
I suggested to Rohit that we verify all the investment holdings from the AMC or Registrar statements. I shared with him the link to download a consolidated statement across all mutual funds.
However, the pre-condition for this to work is that you have a common email id registered for all your investments. The consolidated statement will reflect only those investment of yours which have the same email id.
If you have multiple email ids then you have to generate multiple statements using one email id at a time.
Rohit did some work only to realise that he was NOT able to get statements of all his holdings. First he realised that he had used 2 email ids. So he generated two statements. But that still didn’t sum up for all his investments.
He then realised that probably some of his investments don’t even have a email id registered.
What to do now? He used the folio numbers that he knew to download individual statements. He has contacted his agents/brokers/banks for the necessary updation but that too will take time.
Over a week has passed and we are yet to receive all the statements to verify the transactions.
Yet another story. I read on a forum recently where this gentleman wanted to change his bank account details across all his mutual fund investments. His question was if he could do it using just one form?
What do you think? Can he?
The answers he got were to contact each of the AMCs or Mutual Funds separately to contact the registrars like CAMS and Karvy to get the job done.
Yet another case. If you are an existing investor in mutual funds, you must have been receiving emails from mutual funds or calls from your distributor to provide your Additional KYC details or do the FATCA compliance.
It was a real hassle for investors who kept receiving multiple communication from different mutual funds. The biggest issue is that if you don’t comply with the requirements, your mutual fund investments could stop.
What were your options to comply and provide the required details?
If you happen to have investments in schemes of HDFC Mutual fund, Quantum Mutual Fund, Sundaram Mutual Fund and Franklin Templeton Mutual Fund, you would need to visit websites of each of these AMCs and submit your details. The other option is visit the websites of the registrars like CAMS, Karvy, Franklin and Sundaram BNP and provide your details there.
Ah! Effort, effort and more effort.
Now, what if I told you that you could act upon each of the above issues and resolve them in one single action?
Only if you had the Common Account Number or CAN issued by MF Utilities.
I recently signed up for Common Account Number. As soon as it was created all my details across my mutual fund investment holdings were updated in one shot.
- What is Common Account Number or CAN?
- What are the benefits?
- How can you get it?
- What is MF Utilities?
- Is it a distributor? Can you trust it?
- Is there a charge or a fee for it?
- and more…
Let’s get the answers one by one and see how does a life with a Common Account Number would be like.
What is a Common Account Number or CAN?
A Common Account Number is a single reference number issued by MF Utilities (MFU) for a unique combination of
- Number of Investors (1, 2 or 3)
- Order of Holding (A, AB, ABC, BA, AC, CBA)
- Mode of Holding (Single, Joint, Anyone / Survivor)
- Status (Individual, Non-Resident, Company, etc.)
Common Account Number or CAN is your universal folio number for the Mutual Fund Industry. CAN will hold centrally for the industry, the information like:
- Investor Name(s)
- KYC Status
- Income Details
- Mode of Holding
- Tax Status
- Contact details of the primary holder
- Multiple Bank Accounts registered at CAN level
- Depository Account details
- Power of Attorney, if any
- Guardian Information for minor applicant
- FATCA, UBO & OECD related details etc.
What are the benefits of Common Account Number or CAN?
With a CAN, you can:
#1 Update any or all of your details at single place, just once and it would get reflected in all your investments (and not face hassles like you read about earlier in the post).
#2 Do your transactions in mutual funds by just using one form and one cheque. Absolutely no need to fill in multiple forms or give multiple cheques. Soon, this will be online too.
#3 Start multiple SIPs in mutual funds using just one bank mandate using one Common Transaction Form.
#4 View a consolidated view of your investments across industry.
#5 Centralised complaint management and tracking system for complaints across the industry.
Simply put, there will no need to fill new forms every time you were to choose a mutual fund to invest in. One number, one form, one cheque, one place – that is it.
How can you get your Common Account Number or CAN?
To get a Common Account Number, you need to fill up the CAN registration form. You can download the form here. Fill up the required information and supply the necessary documents as mentioned. The form can be submitted to one of Points of Service as mentioned on this link.
Once you have submitted the form, you will receive an SMS and an email or your registered mobile phone and email address, confirming the CAN allotted to you. This should take upto a week.
If you are an existing investor, all your folios across mutual funds will be updated with the latest information that you provide in your CAN form except your address which will still reflect the KYC address.
You can now create your CAN online, completely paperless. Click here to know how.
Please note: KYC Compliance is compulsory for CAN creation. If you are not KYC compliant, you can give your KYC application along with your CAN application.
Complete your Central KYC online, completely paperless. Click here to know how.
What is MF Utilities?
MF Utilities is an initiative by the Mutual Fund Industry to bring ease and convenience to doing mutual fund transactions. Through the creation of CAN, it makes it super easy to invest in mutual funds, using just one cheque, one form or one login. You can also invest in direct plans through MF Utilities.
Is MF Utilities a distributor? Can one trust it?
No, MF Utilities is not a distributor. It is an organisation created by the Mutual Fund industry to build a system for the benefit of investors, distributors and the mutual fund companies. I guess that itself makes it trusted.
Will MF Utilities also give you advice on which funds to buy or sell?
No, MF Utilities will not give advice at all. It is an industry system agnostic to any mutual fund and works for the benefit of all. The primary purpose of the organisation is to provide the technology, system and support to investors, distributors and mutual fund companies.
If you wish to get advice, you should get in touch with an investment adviser or a distributor of mutual funds.
Are there any charges or fees applicable?
There are absolutely NO charges or any fee payable by the investor for getting a CAN or doing the transactions.
Can you hold multiple CANs?
Yes, you can hold multiple CANs for different combinations of holders. For example, in case of Rohit, he can have a CAN in his individual name and a CAN in his wife’s name and another CAN in their joint names.
For more FAQs on CAN, MF Utility, please visit this link.
As you now know, mutual fund transactions are now so convenient and hassle free.
I would strongly recommend that you get your Common Account Number or CAN today. That would be a good beginning to the year 2016 for you.
Yes, you CAN do it with mutual funds.
Generate your CAN application form online on Unovest
Now, you can use your free account on Unovest to login and fill up your CAN application form. Just fill it, print it and send it. As easy as it can get.
Don’t have an account, create one here.
Get e-CAN, completely paperless
You can now apply and get a CAN, online, paperless. Click here to know how.
If you have any queries, do write in the comments or send us an email.