SEBI Streamlines the KYC Process and Simplifies Risk Management Framework for KRAs

Circular No. SEBI/HO/MIRSD/FATF/P/CIR/2023/0144, Dated: 11.08.2023

Earlier, SEBI specified the framework for the validation of records by KRAs in the securities market. Now, SEBI has decided to simplify the KYC process and rationalize the risk management framework for KYC (Know Your Client) Registration Agencies (KRAs).

Accordingly, clients who have completed KYC using documents other than Aadhaar must undergo verification within 90 days from September 1, 2023. For the interest of investors and ease of transaction in the securities market, clients are permitted to open accounts with intermediaries and transact in the securities market as soon as the KYC process is completed.

As a part of the risk management framework, KRAs are required to verify the attributes of records of all clients such as PAN, name & address of all clients within two days of receipt of KYC records. Additionally, KRAs will verify the client’s mobile number and e-mail ID.

Further, clients whose attributes of records cannot be verified shall not be allowed to transact further in the securities market until the attributes are verified.

Also, 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.

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