Guidelines in pursuance of amendment to SEBI KYC Registration Agency (KRA) Regulations, 2011
KYC Registration Agency (KRA) is a company formed and registered under the Companies Act,2013 and which has been granted a certificate of registration under these regulations which hereinafter shall be deemed to be an intermediary in terms of the provisions of the Act.
KYC’’ means the procedure specified by the Board for identifying and verifying the Proof of Address, Proof of Identity and compliance with rules, regulations, guidelines and circulars issued by the Board or any other authority for Prevention of Money Laundering from time to time.
REGISTRATION OF KRA-
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S.N.O. |
PARTICULARS | CONTENT |
| 1. | Application- | Made to board in form specified under schedule II.
REQUIREMENTS- ♦ Not include any mislead or false information, if any mislead information provided it shall be rejected provided opportunity of being heard granted. Before rejecting any application board may provide 30 day time period to remove any objections. FURNISHING OF INFORMATION, CLARIFICATION AND PERSONAL REPRESENTATION- If board require it may ask further clarification or information. CONSIDERATION OF APPLICATION FOR GRANT OF CERTIFICATE OF REGISTRATION- Following conditions are to be satisfied for grant of certification- ♦ Applicant should be fit and proper person. ♦ wholly owned subsidiary of a recognized stock exchange, having nation-wide network of trading terminals ♦ wholly owned subsidiary of a depository or any other intermediary registered with the Board ♦ wholly owned subsidiary of a Self-Regulatory Organization (SRO) registered under SEBI (Self-Regulatory Organization) Regulations, 2004 ♦ Applicant shall have a net worth of at least Rs 25 crore on a continuous basis. Grant of certificate of registration7- (1) The Board, once satisfied that applicant is eligible, shall send intimation to that effect to the applicant, for the grant of certificate of registration, and grant a certificate in the Form. (2) The certificate of registration granted under sub-regulation (1) shall be valid unless it is suspended or cancelled by the Board.] (3) The grant of certificate of registration shall be subject to the payment of such fees. 4) The KRA shall immediately intimate the Board, details of changes that have taken place in the information that was submitted, while seeking registration. (5) Where the KRA proposes change in control, it shall obtain prior approval of the Board for continuing to act as such after the change. |
| 2. | Functions and obligations of the KRA- |
♦ Prepare the Operating Instructions in co-ordination with other KRA(s) and issue the same to implement. ♦ Have electronic connectivity. ♦ Have a secure data transmission link with other KRA(s) and with each intermediary that uploads the KYC documents on its system and relies upon its data. ♦ Responsible for storing, safeguarding and retrieving the KYC documents and submit to the Board or any other statutory authority as and when required. ♦ Carry out an independent validation. ♦ Updated information shall be disseminate by the intermediary. ♦ Sufficient back of electronic records to be placed so that records remain secured also prevent from unauthorised access. ♦ have adequate mechanisms for the purposes of reviewing, monitoring and evaluating its controls, systems, procedures and safeguards. ♦ Appoint a compliance officer. |
| 3. | Sharing of KYC information in the financial sector- |
♦ access the system of KRA for undertaking KYC of their clients who engage them for financial services. ♦ system may be connected with any central KYC registry authorised by the Central Government for the purpose of collation and sharing of the KYC information in the financial sector. |
| 4. | INSPECTION of KRA- | Board appoint one or more persons as inspecting authority to undertake inspection of the books of accounts, records, documents, infrastructure, systems and procedures, of a KRA,
BOARD MAY INSPECT A KRA FOR THE FOLLOWING PURPOSES-
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| 5. | KRA TO ABIDE BY CODE OF CONDUCT-
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KRA holding a certificate of registration shall at all times abide by the Code of Conduct as specified in Schedule III of these regulations.
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Guidelines in pursuance of amendment to SEBI KYC (Know Your client) Registration Agency (KRA) Regulations, 2011-
SEBI vide its circular MIRSD/Cir-26 /2011 dated December 23, 2011 had issued guidelines to implement the SEBI {KYC Registration Agency (KRA)} Regulations, 2011. SEBI issued further guideline in this regard vide Circular No. SEBI/HO/MIRSD/DoP/P/CIR/2022/46 Dated- 06/04/2022.
FOLLOWING ADDITIONAL GUIDELINES ARE BEING ISSUED:
1. KRAs shall continue to act as repository of KYC data in the securities market and shall be responsible for storing, safeguarding and retrieving the KYC documents and submit to the Board or any other statutory authority as and when required.
2. KRAs shall independently validate records of those clients (existing as well as new) whose KYC has been completed using Aadhaar as an OVD. The records of those clients who have completed KYC using non-Aadhaar OVD shall be validated only upon receiving the Aadhaar Number.
3. During the process of validation, KRAs shall validate the following details-
4. Develop systems/mechanism, in consultation with SEBI and in co-ordination with each other, and shall follow uniform internal guidelines detailing aspects of identification of KYC attributes and procedures for KYC validation.
5. Promptly inform the respective RIs of deficiency/inadequacy in client’s KYC documents.
6. Onsuccessful completion of KYC validation, a unique client identifier called KRA identifier shall be assigned by KRA to the client and such KRA identifier may be used by the client for opening of account with any other intermediary.
7. KYC records of new clients (who have used Aadhaar as an OVD) shall validated within 2 days of receipt of KYC records by KRAs.
8. KYC records of all existing clients (who have used Aadhaar as an OVD) shall be validated within a period of 180 days from July 01, 2022.
9. KRA shall intimate the KRA identifier to the client within 2 working days of receipt of KYC records by the KRAs by post or email and maintain the proof of dispatch.
10. For non-Aadhaar KYC OVD, the KRA shall only store such records and the same would not be validated by KRAs unless Aadhaar number is provided by the client.
11. Validation of all KYC records (new and existing) shall commence from July 01, 2022.
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