The National Stock Exchange (NSE) on December 29, 2023, issued a circular regarding the Clarification on the Know Your Client (KYC) Process and the Use of Technology for KYC.
The following has been stated:
• In the recent past, the exchange has observed that some of the members are taking default consent for the trading preferences (Selection of Segment), either being auto-populated or provided as a default option, with or without providing any option to the client to deselect/opt out of any such segment(s) at the time of onboarding.
• By not obtaining the express consent and/or explicit confirmation from the clients regarding Trading preference in the Equity Derivatives/Currency Derivatives/Commodities Derivatives Segments during the online account opening process, the members are not adhering to the guidelines issued vide aforesaid circulars w.r.t trading account opening including onboarding of the clients through online KYC.
• Given the above, it is reiterated that the members shall obtain express consent and/or explicit confirmation from the clients for the trading preferences in the Equity Derivatives/Currency Derivatives/Commodities Derivatives Segments by providing an option to the clients to only select/opt-in at the time of onboarding of the client.
[Circular No: 112/2023]
