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

Issuance of Circular on Simplification of KYC process and rationalisation of Risk Management Framework at KRAs

11-Aug-2023 | SEBI/HO/MIRSD/FATF/P/CIR/2023/0144

Securities and Exchange Board of India (SEBI) has issued a Circular regarding the Simplification of the KYC process and the rationalization of the Risk Management Framework at KYC (Know Your Client) Registration Agencies (KRAs), effective from 1st September 2023.

By virtue of the Circular, investors' convenience and ease of transactions in the securities market are prioritized. Clients will be permitted to open accounts with intermediaries and engage in securities market transactions once the KYC process is completed. Subsequently, as part of the risk management framework, KRAs will verify specific attributes of clients' records within 2 days of receiving the KYC records. These attributes include:

PAN (including PAN Aadhaar linkage, as stipulated in rule 114AAA of the Income-tax Rules, 1962)
Name
Address
Mobile number
Email ID
For PAN-exempt records, KRAs will verify the other attributes (name, address, mobile number, and email ID). The validated records will be portable, allowing clients to avoid undergoing the KYC process again when dealing with different intermediaries in the securities market. Intermediaries will retrieve the validated records from the KRA database.

Please note that SEBI Circular SEBI/HO/MIRSD/DoP/P/CIR/2022/46 dated April 06, 2022, will be rescinded starting from the effective date of this circular, i.e., September 01, 2023.

Additionally, records of all existing clients whose KYC was completed based on documents other than Aadhaar will be verified within 90 days from September 01, 2023.

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