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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

02-Sep-2023 | Circular Ref. No: 31/2023

National Stock Exchange of India Limited (NSE) has issued a circular regarding guidelines in pursuance of an amendment to the SEBI KYC (Know Your Client) Registration Agency (KRA) Regulations, 2011, effective from 2nd September 2023. The key points from the circular are:

Amendment to SEBI KYC KRA Regulations: The circular is in response to an amendment to the SEBI KYC KRA Regulations, 2011, aimed at simplifying the KYC process and rationalizing the Risk Management Framework at KYC Registration Agencies (KRAs).

SEBI Circular Reference: The circular refers to SEBI Circular SEBI/HO/MIRSD/DoP/P/CIR/2022/46 dated April 06, 2022, specifically focusing on point 11 of that circular.

KYC Records Validation: The SEBI Circular mentioned that clients whose KYC records are not found to be valid by KRA after the validation process shall be allowed to transact in the securities market only after their KYC is validated.

Non-Compliant KYC Records: In continuation of the SEBI Circular, the NSE circular dated August 18, 2023, states that clients whose KYC records are not found valid by KRA will not be permitted to trade on the Exchange starting from September 02, 2023.

Flagging Non-Compliant PANs: The Exchange will flag the PANs (Permanent Account Numbers) that are non-compliant with KRA requirements as "Not permitted to trade" starting from September 04, 2023. These PANs will also not be allowed to square off their open positions.

KRA Compliance: PANs that become KRA compliant subsequently will be permitted to trade on the next trading day (T+1), based on the information received from KRA by the Exchange on the current trading day (T Day).

Daily Files: The Exchange will provide segment-wise files containing details of UCCs (Unique Client Codes) that are Not Permitted to Trade on a daily basis on the extranet. These files will also contain the KRA flag starting from September 03, 2023

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