SEBI KRA Surrender Framework – Guidelines for Transfer of KYC Records & SOP

Circular No. SEBI/HO/MIRSD/PODFATF/P/CIR/2025/123, Dated 05.09.2025

1. Introduction

The Securities and Exchange Board of India (SEBI) has introduced a streamlined framework for the surrender of registration by KYC Registration Agencies (KRAs). The new guidelines cover both voluntary and involuntary surrender of registration and are aimed at ensuring smooth transfer of records and continuity of investor services.

2. Transfer Of KYC Records

As per the revised process, a KRA surrendering its certificate of registration (the Transferor KRA) must transfer all KYC records, including updates, modifications, and audit trails, to another SEBI-registered KRA (the Transferee KRA). This measure is designed to ensure that investor services remain uninterrupted and that clients are not required to undergo fresh KYC formalities.

3. Standard Operating Procedure (SOP)

To enable a seamless transition, SEBI has mandated that each Transferor KRA must put in place a Standard Operating Procedure (SOP) approved by its board within 90 days. The SOP should be published on the KRA’s website and must clearly outline how critical operations and services will be handed over to the Transferee KRA. It must also address the protection of investor data, settlement of contractual and statutory obligations, and steps to avoid disruption in the securities market.

4. Oversight Committee For Monitoring

Further, SEBI requires the Transferor KRA to constitute an Oversight Committee to supervise the winding down process. This committee will be responsible for monitoring the transfer of KYC data, ensuring seamless investor services, and overseeing compliance with the SOP. By making the committee accountable, SEBI aims to add a robust layer of governance to the transition process.

5. Conclusion

The SOP must be reviewed periodically—either when circumstances necessitate or at least once every five years—to ensure its continued relevance. With these measures, SEBI has created a comprehensive framework that ensures continuity of investor services, data integrity, and market stability, even when a KRA exits the system.

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