The Securities Exchange Board of India (SEBI) on March 10, 2026, issued a notification regarding KYC Validation Requirements and Trading Restrictions for Non-Compliant Clients.
The following has been stated:
As per the amendments to the KYC Registration Agency (KRA) Regulations, 2011 and related circulars issued by the Securities and Exchange Board of India, new guidelines have been introduced to simplify the KYC process and strengthen the risk management framework at KRAs. According to the latest exchange notice dated February 13, 2026, clients whose KYC records are marked as “On Hold” by KRAs for any reason—whether Aadhaar-based or non-Aadhaar Officially Valid Document (OVD) based—submitted between February 1, 2026 and February 28, 2026 will be treated as non-validated.
Such clients will not be permitted to trade on the exchange from March 21, 2026, and they will also not be allowed to square off their existing open positions until their KYC validation is completed. Any open positions in derivative contracts will remain until the natural expiry of the contract if the validation requirements are not fulfilled. The exchange will flag the PANs of these non-compliant clients as “Not Permitted to Trade.” However, once the KYC becomes compliant with the KRA requirements, the client will be allowed to resume trading on T+1 day based on the information shared by the KRAs with the exchange.
Additionally, as per the SEBI circular dated October 3, 2023, regarding the centralized mechanism for reporting the demise of investors through KRAs, all SEBI-registered regulated entities are required to block debit transactions, suspend trading activity, and inactivate or close the Unique Client Code (UCC) across all stock exchanges when such information is received. The demise data of investors is shared by KRAs with exchanges on a daily basis to ensure timely compliance.
The exchange has also shared the list of non-compliant clients whose KYC validations are pending. Members can access this file at the specified directory path: \EQ\Transaction\March-2026\10-03-2026\Non_Validated_Clients_by_KRAs_Clgno_xxxx.TXT. For any clarifications, members may contact the exchange through the provided phone numbers or email support.
Please refer to the document for more details.
[Notice No. 20260310-17]
