The Securities and Exchange Board of India (SEBI) has issued Circular No. SEBI/HO/MIRSD/SECFATF/P/CIR/2024/36 dated May 6, 2024, addressing entities registered with SEBI under Section 12 of the Securities and Exchange Board of India Act, 1992, and stock exchanges. The circular pertains to the use of e-KYC Aadhaar Authentication services of UIDAI (Unique Identification Authority of India) in the securities market by designated entities known as sub-KUAs (sub Know Your Customer User Agencies). Here are the key points of the circular:
- Background: The circular refers to the Master Circular on Know Your Client (KYC) norms for the securities market, which details provisions for Aadhaar-based e-KYC processes and e-KYC Authentication facilities for Resident Investors under Section 11A of the Prevention of Money Laundering Act, 2002.
- Notification by Department of Revenue, Ministry of Finance: The circular mentions that the Department of Revenue, Ministry of Finance, has issued gazette notifications from time to time, notifying entities authorized to undertake Aadhaar authentication services of UIDAI under Section 11A of the Prevention of Money Laundering Act, 2002.
- Recent Notification: A specific entity has been notified via Gazette Notification S.O. 1863(E) dated April 30, 2024, permitting it to use Aadhaar authentication services of UIDAI under Section 11A of the Prevention of Money Laundering Act, 2002. The entity mentioned is 360 ONE Distribution Services Limited.
- Compliance and On-boarding Process: The notified entity must follow the process detailed in SEBI’s circular dated October 12, 2023, and any additional requirements prescribed by UIDAI. Know Your Customer User Agencies (KUAs) are responsible for facilitating the on-boarding of the entity as a sub-KUA to provide Aadhaar authentication services with respect to KYC.
- Legal Authority: The circular is issued under the powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect investors’ interests in securities and promote the development and regulation of securities markets.
The circular is signed by Sapna Sinha, Deputy General Manager of the Market Intermediaries Regulation and Supervision Department at SEBI. It includes contact information for further inquiries. Additionally, Annexure A provides the text of the Gazette Notification issued by the Ministry of Finance, specifying the authorized entity.
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Securities and Exchange Board of India
Circular No. SEBI/HO/MIRSD/SECFATF/P/CIR/2024/36 Dated: May 06, 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. 1863(E) dated April 30, 2024, notified one entity which is 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 entity 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 the entity as sub-KUA 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
Annexure A
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 30th April, 2024
S.O. 1863(E).—In exercise of the powers conferred by 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 entity, namely, the 360 ONE Distribution Services Limited shall 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 appropriate regulator namely, the Securities and Exchange Board of India, hereby permits the said reporting entity to perform authentication under the Aadhaar Act for the purposes of section 11A of the Money-laundering Act.
[F. No. P-12011/3/2022-ES Cell-DOR]
MANOJ KUMAR SINGH, Director (Headquarter)
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