Special Categories — NRI, Minor, HUF, Trust, Corporate

Distributors will encounter all these categories at some point in their practice. The most common special category is NRIs — and NRI transactions are where most distributors stumble. Here is a category-by-category breakdown. NRI (Non-Resident Indian): NRIs can invest in Indian mutual funds on a repatriation basis (can take money back abroad) or non-repatriation basis (money stays in India). For repatriation, an NRE (Non-Resident External) or FCNR (Foreign Currency Non-Resident) bank account is required. For non-repatriation, an NRO (Non-Resident Ordinary) account is used. Important restriction: NRIs from certain countries (USA and Canada primarily) face restrictions because of FATCA (Foreign Account Tax Compliance Act) compliance requirements — many AMCs do not accept investments from US/Canada-based NRIs due to the high compliance burden. Additionally, there are restrictions on NRI investments in certain sectoral and thematic funds. NRIs investing through the mutual fund route (as opposed to the FPI route) follow different regulations, and distributors must understand these distinctions. PIO (Person of Indian Origin) and OCI (Overseas Citizen of India): Treated similarly to NRIs for mutual fund investment purposes. They need valid PIO/OCI cards and follow the same NRE/NRO banking route. Minor: A minor (below 18 years) can invest in mutual funds through a guardian. The guardian must be a natural guardian (parent) or a court-appointed guardian. The guardian operates the account on the minor's behalf. At age 18, the minor-to-major transition must be completed — all transactions freeze until this is done. HUF (Hindu Undivided Family): The Karta (head of the HUF) operates the MF account. The HUF PAN is used (not the Karta's individual PAN). HUF has its own separate tax identity. Trust and Corporate: Require board resolution or trust deed authorizing the investment, along with list of authorized signatories, PAN of the entity, and KYC of the authorized persons. Operational procedures are more complex. Micro-SIP: For small investors who may not have PAN, SEBI allows investments up to ₹50,000 per year per AMC with simplified KYC. SIP amounts can be as low as ₹100. This was designed to bring financial inclusion to the masses. With the Indian MF industry now having over 27 crore folios and AUM exceeding ₹82 lakh crore (as of February 2026), initiatives like Micro-SIP play a vital role in expanding the investor base.