Mumbai, Oct. 24 -- The Securities and Exchange Board of India (SEBI) has released a consultation paper proposing a standardised process for opening mutual fund folios and executing the first investment. The proposal aims to ensure that all new folios are fully KYC-compliant before any transaction or investment is initiated.

Under the proposal, mutual fund folios will be activated only after the Know Your Client (KYC) verification is successfully completed and marked compliant in both the Asset Management Company (AMC) system and the KYC Registration Agency (KRA) database. Investors will be allowed to begin transactions once this verification is confirmed.

SEBI noted that the current sequential verification process sometimes results in K...