SEBI introduces single-window entity for KYC norms
03 Dec 2011
Capital market watchdog Securities and Exchange Board of India (SEBI) has announced the launch of an independent entity to ensure single-window scrutiny of 'know-your-customer' norms.
A KYC Registration Agency (KRA) would be responsible for capturing and maintaining KYC records of all investors of SEBI-regulated entities. Wholly-owned subsidiaries of recognised stock exchanges, depositories, self-regulated organisatioins (such as the Association of Mutual Funds of India) and other SEBI-registered intermediaries are eligible to become KRAs.
The stock market regulator has stipulated a minimum net worth of Rs25 crore on a continuous basis for the entities to qualify as KRAs. Investors will then no longer have to submit separate KYCs to capital market entities, as one body would be capturing all their data.
At present, investors have to provide their details while opening a depository account, a broking account, or a mutual fund.
SEBI has stipulated that there should be no conflict of interest of a proposed KRA and its other commercial activities. They should also have the technological and organisational capabilities, including safeguards, for maintaining data privacy and preventing unauthorised sharing of the data.
KRAs also have to follow a SEBI-specified code of conduct. They have to pay Rs50,000 as application fees and Rs1 lakh as initial and permanent registration fees, besides Rs1 lakh as annual fees.
