Sebi eases KYC registration process through KRAs

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The Securities and Exchange Board of India has decided to simplify the risk management framework for validating Know Your Customer (KYC) records through KYC Registration Agencies (KRAs). This is expected to ensure ease of transacting for investors.

Under the new framework, KRAs can now verify PAN, name, address, email, and mobile number from official databases. If these details are found to be in order, they will be considered validated records, according to a circular issued by Sebi.

The exchanges, depositories, and relevant intermediaries are tasked with implementing necessary technical changes in their systems by the end of May.

Mutual fund houses, broking firms, and portfolio management service providers will need to implement robust compliance tools and risk management frameworks to safeguard investor data privacy and security. This will help ensure that all investors are onboarded after identity verification.

Sebi simplified the system based on the feedback received from the stakeholders in the securities market. Simplifying the guideline, the regulator has modified the circular issued in October 2023. In October last year, the verification process underwent an update, invalidating proofs of address such as ration cards, electric bills, or scanned Aadhar cards.

Presently, the mandate requires KRAs to verify certain attributes of client records within two days of receiving the KYC record, including Permanent Account Number (PAN), name, and address. “Going forward, the client’s records verified by KRAs with official databases (Income Tax Department database on PAN, Aadhaar XML, Digilocker or M-Aadhaar) will be considered ‘validated records’.

(With inputs from PTI)