SEBI Circular: 24 Entities Authorized for Aadhaar e-KYC in Securities Market

SEBI’s recent circular delineates the entities authorized to employ Aadhaar e-KYC authentication services in the securities market. This article elucidates the circular’s implications and the entities enlisted for this purpose.

The circular, SEBI/HO/MIRSD/SECFATF/P/CIR/2024/21, underscores the utilization of Aadhaar-based e-KYC processes and authentication facilities for Resident Investors in the securities market. Entities designated as sub-KUA (KYC User Agency) are pivotal in this process.

Ministry of Finance’s Gazette Notification S.O. 801(E) dated February 20, 2024, lists 24 entities permitted to utilize Aadhaar authentication services under Section 11A of the Prevention of Money-laundering Act, 2002. These entities are empowered to conduct Aadhaar e-KYC authentication services.

The circular mandates that these entities adhere to the processes delineated in SEBI’s previous circular dated October 12, 2023, and any directives issued by UIDAI. Additionally, Know Your Customer (KYC) User Agencies (KUAs) are tasked with facilitating the onboarding of these entities as sub-KUAs.

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Securities and Exchange Board of India

Circular No. SEBI/HO/M IRSD/SECFAT F/P/CIR/2024/21 Dated: April 05, 2024

To,
1. All Intermediaries registered with SEBI under Section 12 of the Securities and Exchange Board of India Act, 1992
2. Stock Exchanges

Dear Sir/Madam,

Subject: Entities allowed to use e-KYC Aadhaar Authentication services of UIDAI in Securities Market as sub-KUA

1. The Master Circular on Know Your Client (KYC) norms for the securities market SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 dated October 12, 2023 inter alia has detailed the provision for the adaptation of Aadhaar based e-KYC process and e-KYC Authentication facility for Resident Investors under section 11A of the Prevention of Money Laundering Act, 2002 in securities market as sub-KUA and on-boarding process of sub-KUA by UIDAI.

2. Department of Revenue, Ministry of Finance (DoR-MoF) has from time to time issued gazette notifications notifying entities, to undertake Aadhaar authentication service of UIDAI under Section 11A of the Prevention of Money Laundering Act, 2002.

3. DoR-MoF has vide Gazette Notification S.O. 801(E) dated February 20, 2024, notified 24 entities which are permitted to use Aadhaar authentication services of UIDAI under section 11A of the Prevention of Money-laundering Act, 2002. A copy of the notification is attached at Annexure A

4. The above mentioned entities shall follow the process as detailed in SEBI circular dated October 12, 2023 and as may be prescribed by UIDAI from time to time. The KUAs shall facilitate the on-boarding of these entities as sub-KUAs to provide the services of Aadhaar authentication with respect to KYC.

5. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets.

Yours faithfully,

Sapna Sinha
Deputy General Manager
Market Intermediaries Regulation and Supervision Department
Tel. no.:022 2644 9748
email id: sapnas@sebi.gov.in

MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 20th February, 2024

S.O. 810(E).— In exercise of the powers conferred by provisos to sub-section (1) of section 11A of the Prevention of Money-laundering Act, 2002 (15 of 2003)(hereinafter referred to as the Money-laundering Act), the Central Government, on being satisfied that the reporting entities mentioned in the TABLE below comply with the standards of privacy and security under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of 2016)(hereinafter referred to as the Aadhaar Act), and it is necessary and expedient to do so, and after consultation with the Unique Identification Authority of India established under sub-section (1) of section 11 of the Aadhaar Act and the regulatory authority, namely, the Securities and Exchange Board of India, hereby notifies the reporting entities to perform authentication service under the Aadhaar Act for the purposes of section 11A of the Money-laundering Act, namely:-

TABLE

[F. No. P-12011/3/2022-ES Cell-DOR(Part-1)]

MANOJ KUMAR SINGH, Director (Headquarter