Capital markets regulator Securities and Exchange Board of India (SEBI) has simplified the KYC process and rationalised the risk management framework at KYC registration agencies (KRAs) to ease the onboarding of clients for dealing in the securities market.
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, said SEBI in a circular on August 11.
‘’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,‘’ added the regulator.
SEBI also said that 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. The KRAs will verify the client’s mobile number and e-mail ID.
In case the client records do not have the requisite data, then such clients will not be allowed to transact further in securities market until the attributes (the data given) are verified, according to the authority.
The regulator has asked KRAs to develop mechanisms, in coordination with each other, and follow a 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,‘’ said SEBI.
The KYC process means obtaining the Proof of Identity (PoI) and Proof of Address (PoA) of the client. A KYC check is the mandatory process of identifying and verifying the client’s identity when opening an account and periodically over time. According to official rules, banks must ensure that their clients are genuinely who they claim to be.