Sebi comes out with new guidelines for KYC Registration Agencies

Capital markets regulator Sebi on Wednesday issued recent guidelines for KYC Registration Agencies (KRAs) whereby such businesses should independently validate KYC data of all purchasers from July 1.

The transfer comes after Sebi, in January, notified new norms to make KRAs accountable for carrying out unbiased validation of the KYC data uploaded onto their system by Registered Intermediaries (RIs).

Under the notified guidelines, such businesses should keep an audit path of the add/modification/obtain with respect to KYC data of purchasers.

In a round, Sebi mentioned KRAs will independently validate data of these purchasers (current in addition to new) whose KYC has been accomplished utilizing Aadhaar as an Officially Valid Document (OVD).

The data of these purchasers who’ve accomplished KYC utilizing non-Aadhaar OVD shall be validated solely upon receiving the Aadhaar quantity.

“The validation of all KYC records (new and existing) shall commence from July 1, 2022,” the Securities and Exchange Board of India (Sebi) mentioned.

According to the regulator, purchasers whose KYC data will not be discovered to be legitimate by KRA after the validation course of shall be allowed to transact in securities market solely after their KYC is validated.

The regulator has put in place the extra guidelines on KRAs with a purpose to implement the rules successfully.

KRAs will proceed to behave as repository of KYC information within the securities market and shall be accountable for storing, safeguarding and retrieving the KYC paperwork.

During the method of validation, KRAs will validate particulars pertaining to Aadhaar by Unique Identification Authority of India (UIDAI) authentication, PAN utilizing the Income Tax database and cellular quantity and e-mail ID utilizing one-time password validation. This is relevant solely in circumstances the place cellular quantity and e-mail ID supplied by consumer will not be seeded with Aadhaar.

The KRAs will develop methods/mechanism, in session with Sebi and in co-ordination with one another. It will comply with uniform inner guidelines detailing elements of identification of KYC attributes and procedures for KYC validation.

The methods of RIs and the KRAs shall be built-in to facilitate seamless motion of KYC paperwork.

KRAs will promptly inform the respective RIs of deficiency/inadequacy in consumer’s KYC paperwork, if any, that’s noticed for validation.

On profitable completion of KYC validation, Sebi mentioned {that a} distinctive consumer identifier known as KRA identifier shall be assigned by KRA to the consumer. Such a KRA identifier could also be utilized by the consumer for opening of account with every other middleman, with out repeating the KYC course of.

The KYC data of new purchasers, who’ve used Aadhaar as an formally legitimate doc, shall be validated inside two days of receipt of KYC data by KRAs. The data of all current purchasers shall be validated inside a interval of 180 days from July 1.

KRA should intimate in regards to the KRA identifier to the consumer inside two working days of receipt of KYC data. This must be executed by publish or e-mail, and the KRA involved should keep the proof of dispatch.

(Only the headline and movie of this report could have been reworked by the Business Standard workers; the remainder of the content material is auto-generated from a syndicated feed.)

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