The Bombay Stock Exchange (BSE) on August 21, 2023, notified regarding the Validation of the Email ID/Mobile number in KYC.
This communication refers to a SEBI (Securities and Exchange Board of India) circular dated April 6, 2022, which contains guidelines for Know Your Customer (KYC) validation for clients who have completed KYC using Aadhaar as an Officially Valid Document (OVD) and those using Non-Aadhaar OVD.
Here's a summary of the key points:
1. KYC Validation Guidelines: SEBI has advised KYC Registration Agencies (KRAs) to implement new guidelines for validating the records of clients, both existing and new, who have completed KYC using Aadhaar as an OVD.
2. Validation Process: KRAs are instructed to validate several client details:
•Aadhaar through the UIDAI authentication/verification mechanism.
•Mobile Number/Email ID using OTP validation (only when not seeded with Aadhar).
•PAN using the Income Tax Database.
3. KYC Status "On Hold": If the mobile number and email ID cannot be verified, the KYC status against the PAN will be marked as 'ON HOLD' starting from August 18, 2023.
4. Rejection of Orders: For clients whose mobile number and email ID are not verified, all new orders received in non-demat mode (e.g., Fresh/Additional Purchase, NFO, Redemption, Switch) and all types of systematic transactions (e.g., SIP, SWP, STP) will be rejected for KYC status 'ON HOLD.'
5. Depository Account Suspension: Central Depository Services (India) Limited has decided that demat accounts of existing clients whose KYC is not found valid by KRA will be suspended on September 6, 2023, based on updated data available from KRAs as of September 1, 2023.
6. Action Required: Members are requested to take necessary action before placing any type of order, ensuring that their KYC information is up to date and compliant with the new guidelines to avoid rejection of transactions and suspension of demat accounts.
[Notification No.20230819-6]
