Sebi simplifies KYC process, rationalises risk management framework at KRAs
Aug 11, 2023
Synopsis
Sebi asked KRAs to develop mechanisms, in coordination with each other, and follow uniform internal guidelines detailing aspects of the identification of attributes and procedures for verification in consultation with the markets regulator.
To ease the onboarding of clients for dealing in the securities market, Sebi on Friday simplified the KYC process and rationalised the risk management framework at KYC registration agencies (KRAs). The records of all existing clients, whose KYC has been completed based on officially valid documents other than Aadhaar, would be verified within a period of 90 days from September 1, 2023, Sebi said in a circular.
For the interest of investors and ease of transaction in the securities market, the client will be allowed to open an account with intermediaries and transact in the securities market as soon as the KYC (Know Your Client) process is completed, Sebi said.
Subsequently, as a part of the risk management framework, the KRAs will verify attributes such as the PAN, name and address of all clients within two days of receipt of KYC records. Additionally, the KRAs will verify the client's mobile number and e-mail ID.
While clients in whose case, attributes of records cannot be verified, will not be allowed to transact further in the securities market until the attributes are verified and the validated records would be allowed portability -- the client need not undergo the KYC process again when he/she approaches different intermediary. The intermediary will fetch the validated records from the KRA database.
Sebi asked KRAs to develop mechanisms, in coordination with each other, and follow uniform internal guidelines detailing aspects of the identification of attributes and procedures for verification in consultation with the markets regulator.
"Further, the systems of intermediaries and the KRAs shall be integrated to facilitate seamless movement of documents/information to and from the intermediary to the KRAs for verification/validation of attributes under risk management framework," Sebi said.
The KYC process means obtaining the Proof of Identity (PoI) and Proof of Address (PoA) of the client.
[The Economic Times]
