Sebi eases KYC process for investors

Market regulator Securities and Exchange Board of India (Sebi) on Thursday cleared a proposal to allow various market entities such as brokers and mutual funds to get investor details from centralised KYC agencies, rather than carrying out a fresh KYC verification procedure.

The client who has already done the KYC with any Sebi registered intermediary need not undergo the same process again when he approaches another intermediary.

SEBI said the KYC registration system (KRA system) has evolved and stabilised over a period of two years and, with inter-operability in place, there is easy exchange of KYC data among five SEBI registered KRAs. The system has benefited the investors as well as the intermediaries, it noted.

At present, there is an option for a market intermediary to access the centralised KRA system in case of a client who is already KYC compliant, or carry fresh KYC process.

The SEBI board, which met on Thursday, decided to do away with the second option of fresh KYC processing being carried out, if the concerned investor has once gone through the KYC procedure with any of the registered intermediaries.

However an intermediary can undertake enhanced KYC measures commensurate with the risk profile of its clients, SEBI said.

KRAs are institutions which maintain KYC details of investors.

Wholly-owned subsidiaries of stock exchanges and depositories are eligible able to act as KRA.

In December last year, SEBI had simplified investor account opening by doing away with details about income and occupation of the applicant for the purpose of centralised KYC registration.

The regulator said certain information about applicants like gross annual income details, occupation, permanent address proof and whether the applicant is a politically exposed person are not required for the centralised KRAs.