The Securities and Exchange Board of India, (SEBI) on August 11, 2023, issued a notification regarding the Simplification of the KYC process and the rationalization of the Risk Management Framework at KYC Registration Agencies
This has a reference to the SEBI circular SEBI/HO/MIRSD/DoP/P/CIR/2022/46 dated April 06, 2022, that has specified the framework for validation of records by KRAs in securities market
The following has been stated namely: -
• It states that the KRAs shall verify the following attributes of records of all clients within 2 days of receipt of KYC records
(i) PAN (including PAN Aadhaar linkage, as referred to in rule 114 AAA of the Income-tax Rules, 1962)
(ii) Name
(iii) Address
(iv) client’s mobile number and email id.
• It states that in case PAN exempt records, the attributes i.e. name, address, mobile number, and email id shall be verified by the KRAs
• The Clients in whose case, attributes of records as mentioned in para 5/6 above cannot be verified, shall not be allowed to transact further in the securities market until the attributes are verified.
•It states that the records of those clients in respect of which all attributes mentioned in para 5/6 above are verified by KRAs with official databases (such as the Income Tax Department database on PAN, Aadhaar XML/Digilocker/ M-Aadhaar) shall be considered as Validated Records.
• The KRAs shall develop systems/mechanisms, in coordination 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.
• It further states that the systems of intermediaries and the KRAs shall be integrated to facilitate the seamless movement of documents/information to and from the intermediary to the KRAs for verification/validation of attributes under the risk management framework.
• The records of all existing clients whose KYC has been completed based on OVDs other than Aadhaar, shall be verified within a period of 90 days from September 01, 2023
The SEBI circular SEBI/HO/MIRSD/DoP/P/CIR/ 2022/46 dated April 06, 2022 shall be rescinded from the effective date of this circular i.e. September 01, 2023.
[Circular No. SEBI/HO/MIRSD/FATF/P/CIR/2023/0144]
