Sebi mandates KRAs to update KYC info on Central KYC Records Registry
New Delhi, June 7, 2024
Sebi has asked KYC registration agencies to upload KYC details of all capital market investors from August 1
In a move aimed at streamlining the Know Your Customer (KYC) process, the Securities and Exchange Board of India (Sebi) has directed KYC Registration Agencies (KRAs) to integrate their systems with the Central KYC Records Registry (CKYCRR) and begin uploading verified KYC information of clients starting August 1, 2024.
Previously, the responsibility of uploading KYC details onto CKYCRR fell on market intermediaries such as stock brokers and alternative investment funds due to their account-opening relationships with clients. However, Sebi's latest circular modifies the master circular on KYC norms, shifting this task to KRAs.
What did the new guideline say?
In a circular, Sebi asked registered intermediaries to continue to upload or modify the KYC information with proper authentication on the systems of KRA.
According to the new guidelines, KRAs will have to upload verified or validated KYC information onto CKYCRR within seven days of receiving it from intermediaries.
"The KRAs shall integrate their systems with CKYCRR and commence the uploading of KYC records on CKYCRR from August 1, 2024," Sebi said.
Further, KRAs will ensure that existing KYC records of legal entities and of individual clients are uploaded on to CKYCRR within a period of 6 months from August 1.
What does this mean for people?
Clients will no longer need to submit KYC documents multiple times to different financial institutions, as their verified records will be available in the centralised CKYCRR system.
What is CKYCRR?
CKYCRR is a single KYC system that can be used across various financial transactions, including banks, mutual funds, stocks, insurance, and the National Pension System (NPS). Currently, insurance companies and pension fund companies are already using CKYCRR to verify KYC details, paving the way for mutual fund distributors to utilise CKYC data from these sectors.
The integration of KRAs with CKYCRR is expected to simplify customer onboarding by reducing the turnaround time to acquire new clients. If banks also start uploading KYC details of their customers onto CKYCRR, a single bank account could potentially be sufficient for investing across all financial products.
[The Business Standard]
