Power of Attorney holder

Some mutual fund investors do not operate their own folios. Instead, someone they have legally authorised — a Power of Attorney (PoA) holder — transacts for them.

Granting a PoA does not take the investor out of the picture. The grantor can still operate the account personally whenever they wish; the PoA holder is an addition, not a replacement. What the PoA holder cannot do, however, is touch the folio's nomination — that decision stays with the investor alone.

To operate a folio under a PoA (Chapter 9, sections 9.7 and 9.10.3), both the investor and the PoA holder must independently satisfy KYC and PAN requirements, and a certified copy of the PoA document must be submitted to the mutual fund before the folio can be operated this way.

Once that is done, the PoA holder can conduct all transactions on the folio — purchases, redemptions, switches, systematic instructions — except making or changing a nomination. A nomination cannot be made in favour of a Power of Attorney holder either; the workbook lists PoA holders alongside trusts, societies and partnerships as ineligible nominees.

On the KYC side specifically, a PoA holder cannot complete KYC compliance on behalf of the person who granted the PoA — the investor's own KYC has to be done in the investor's own name, separately from whatever KYC the PoA holder completes for themselves.

Mr Iyer, aged 82 and increasingly unable to visit his bank or broker, grants a specific Power of Attorney to his son to operate his mutual fund folio, which holds Rs 22,00,000 across three schemes.

His son submits a certified copy of the PoA, and both father and son separately complete their own KYC. From then on, the son can place redemptions, switches and fresh purchases on the folio without needing his father's signature each time — and Mr Iyer himself can still walk into the AMC's office and place a transaction directly, since granting the PoA did not remove his own authority.

When Mr Iyer later decides to add his daughter as a nominee on the folio, his son — despite holding the PoA and being able to redeem the entire Rs 22,00,000 — cannot sign that nomination form on his father's behalf. Mr Iyer has to do it himself, or the nomination cannot be registered at all.

Chapter 9 (Investor Services), section 9.7 ("POA as a unit holder") and section 9.13.1 (Nomination) both address the PoA holder's scope directly, and section 9.10.3 covers the separate KYC requirement. Expect a question testing the nomination carve-out specifically — it is the fact examiners return to most often.

• A PoA holder cannot make or change a nomination, and cannot be named as one. This is the single most tested fact about PoA holders in a mutual fund context.
• This is a different mechanism from the general PoA a broker or depository participant holds. Here, an AMC-recognised PoA holder transacts on a mutual fund folio; a broker's PoA operates a demat and trading account. The KYC and nomination rules are specific to the mutual fund context.
• Granting a PoA does not stop the investor operating the account themselves. The two authorities coexist.
• The PoA holder cannot complete KYC on the investor's behalf — each party's KYC is their own responsibility.