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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Guidelines in pursuance of amendment to SEBI KYC (Know Your client) Registration Agency (KRA) Regulations, 2011

18-Aug-2023 | 29/2023

National Stock Exchange (NSE) has issued a circular outlining guidelines in response to the amendment to SEBI KYC (Know Your Client) Registration Agency (KRA) Regulations, 2011, effective from August 18, 2023. As per the circular, Trading Members are instructed to closely monitor the open positions of clients whose KYC has not been validated by the KRA. It is emphasized that appropriate actions should be taken to ensure compliance with this directive. Trading Members are urged to heed and abide by the following guidelines: 1. Validation by KRA: Prior to adding any client record to the Exchange UCC (Unique Client Code) database, Trading Members should ensure that the client's KYC details have been validated by the KRA. This involves verifying the authenticity of identity documents, address proofs, and other pertinent information. 2. Timely Compliance: Strictly adhere to the timelines specified in the SEBI circulars. Trading Members must confirm that client records have been validated by the KRA before initiating any trading activities on their behalf. 3. Records of Compliance: Maintain comprehensive records documenting client validation by the KRA. These records should be easily accessible for regulatory authorities to inspect upon request. 4. Communication: Maintain regular communication with clients to underscore the significance of timely KYC validation and its implications on their trading endeavors. It is important to note that, in consultation with SEBI, it has been decided that clients whose KYC is not validated by the KRA will not be permitted to trade on the Exchange and will also be unable to square up their open positions, if any, starting from September 02, 2023. This restriction will continue until the clients fulfill the aforementioned KYC validation requirement.

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