Customer Due Diligence

Know Your Investor (KYI)

Know Your Investor (KYI) is the set of checks a fund manager, fund administrator or transfer agent carries out on the people and entities that invest in a fund: who they are, who owns and controls them, where their money comes from, and whether they raise sanctions, PEP or other money laundering risks.

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KYI is not a separate legal regime. It is the investment-fund version of Know Your Customer (KYC): the customer due diligence rules that apply to the fund, its manager or its administrator are applied to the fund's investors. The term is common in private funds, where the "customer" relationship can be layered: an investor subscribes into a fund, the fund is managed by an adviser, and an administrator processes the subscription.

Which rules apply depends on where the fund and its service providers are regulated. Singapore fund management companies follow MAS Notice SFA04-N02. Singapore variable capital companies have their own notice, MAS Notice VCC-N01. In the United States, FinCEN's rule bringing most SEC-registered advisers and exempt reporting advisers under the Bank Secrecy Act is due to take effect on 1 January 2028, subject to revisions FinCEN intends to propose; see our guide to the FinCEN investment adviser AML rule. Fund domiciles such as Luxembourg and the Cayman Islands set their own investor due diligence requirements.

A KYI file usually covers:

Identity: verified identity for individuals, and registration and constitutional documents for entities.
Ownership and control: the ultimate beneficial owners of entity investors, traced through trusts, nominees and fund-of-fund structures.
Screening: sanctions, PEP and adverse media checks on the investor and its owners and controllers.
Source of funds and wealth: where the subscription money comes from, with more evidence for higher-risk investors.
Risk rating: a documented risk assessment that sets the level of due diligence and how often the file is refreshed.

KYI happens at onboarding, but not only then. Funds repeat or update checks when an investor transfers its interest to a new holder, when redemption proceeds are to be paid to a third party or an unexpected account, when ownership changes, when screening lists change, and at periodic reviews set by the investor's risk rating.

KYI sits next to, but is separate from, investor eligibility checks such as accredited investor status, and from tax classification under FATCA and CRS. All three are usually collected in the same subscription documents, which is why funds often manage them in one onboarding workflow.

Key points

KYC and customer due diligence applied to fund investors
Covers identity, beneficial owners, screening and source of funds
Repeated on transfers, unusual redemptions and periodic reviews
Often delegated to an administrator, but responsibility stays with the regulated firm

How One Constellation helps

One Constellation gives fund managers and administrators an investor onboarding portal with identity verification, KYB and beneficial-ownership tracing, sanctions, PEP and adverse-media screening, risk rating and case management in one workflow.

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Frequently asked

What does KYI stand for?+

KYI stands for Know Your Investor. It means applying know-your-customer and customer due diligence checks to the investors in a fund or other investment product.

Is KYI the same as KYC?+

KYI is KYC applied to fund investors. The underlying obligations come from the anti-money laundering rules that apply to the fund, its manager or its administrator; KYI is simply the name used in the funds industry.

Who is responsible for KYI in a fund?+

The regulated entity named in the applicable rules, usually the fund, its manager or its administrator. Many managers delegate the work to a fund administrator or transfer agent, but delegation does not remove the regulated firm's responsibility.

When must KYI be repeated?+

On a risk basis: at periodic reviews set by the investor's risk rating, and when something changes, such as a transfer of the investor's interest, a change of ownership, a redemption paid to a third party, or a new sanctions or PEP match.

Investor KYC, Ready for Every Closing

Onboard investors, trace beneficial owners and screen them in one workflow built for fund managers and administrators.

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