SEBI has provided for simplification of KYC & Risk Management Framework at KYC Registration Agencies

SEBI vide circular dated August 11, 2023 has provided for a simplification of KYC process and rationalization of Risk Management Framework at KYC (Know Your Client) Registration Agencies(KRAs). The KRAs shall verify the following attributes of records of all clients within 2 days of receipt of KYC records:

  1. PAN (including PAN Aadhaar linkage, as referred to in rule 114 AAA of the Income-tax Rules, 1962).
  2. Name
  3. Address

Additionally, the KRAs shall verify the client’s mobile number and email id. In case of PAN exempt records, the other attributes i.e. name, address, mobile number and email id shall be verified by the KRAs. Clients in whose case, attributes of records cannot be verified, shall not be allowed to transact further in securities market until the attributes are verified.

The records of those clients in respect of which all attributes are verified by KRAs with official databases (such as Income Tax Department data base on PAN, Aadhaar XML/Digilocker/ M-Aadhaar)shall be considered as Validated Records.

The validated records shall be allowed portability i.e. the client need not undergo the KYC process again when he approaches different intermediary in securities market and the intermediary shall fetch the validated records from the KRA database. The KRAs shall develop systems/mechanism, in co-ordination with each other, and shall follow uniform internal guidelines/standards detailing aspects of identification of attributes and procedures for verification/ validation, in consultation with SEBI.