Sebi proposes framework for winding down of KYC registration agencies

Apr 29, 2025

In a consultation paper, Sebi emphasised that the framework must guarantee uninterrupted services, protection of investor KYC data, and the fulfilment of statutory and contractual obligations

The Securities and Exchange Board of India (Sebi) on Tuesday proposed a framework to ensure the orderly winding down of critical operations and services of KYC registration agencies (KRAs). The framework aims to safeguard investor interests by ensuring continuity of KRA services and a smooth transfer of operations to a designated successor entity in cases of insolvency, cessation, or regulatory action.

In a consultation paper, Sebi emphasised that the framework must guarantee uninterrupted services, protection of investor KYC data, and the fulfilment of statutory and contractual obligations. Additionally, it should facilitate a seamless transition to a successor entity.

The regulator has outlined key requirements for the framework, including the establishment of standard operating procedures (SOPs) and the identification of potential scenarios. KRAs will be responsible for finalising these measures.

[The Business Standard]