SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 28th January, 2022
SECURITIES AND EXCHANGE BOARD OF INDIA
{KYC (KNOW YOUR CLIENT) REGISTRATION AGENCY} (AMENDMENT)
REGULATIONS, 2022
No. SEBI/LAD-NRO/GN/2022/72.—In exercise of the powers under Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities and Exchange Board of India hereby makes the following regulations to further amend the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011, namely:—
1. These regulations may be called the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2022.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011, –
I. In regulation 2, –
(i) in sub-regulation (1), after clause (d), the following new clause shall be inserted, namely, – “(da) “change in control”, in relation to a KRA, means: ─
(i) if its shares are listed on any recognised stock exchange, change in control within the meaning of regulations framed under clause (h) of sub-section (2) of section 11 of the Act;
(ii) in any other case, change in the controlling interest;
Explanation. ─ For the purpose of sub-clause (ii), the expression “controlling interest” means,
(A) an interest, whether direct or indirect, to the extent of at least fifty-one percent of voting rights; or
(B) right to appoint majority of the directors or to control the management directly or indirectly;”
(ii) in sub-regulation (1), in clause (h), the words and symbols “Companies Act, 1956” shall be replaced with the words and symbols “Companies Act, 2013 (18 of 2013)”.
(iii) in sub-regulation (1), in clause (i), the word “prescribed” shall be replaced with the word “specified”.
(iv) in sub-regulation (1), clause (k) and clause (l) shall be omitted.
(v) sub-regulation (2) shall be substituted with the following, namely, –
“(2) All other words and expressions used but not defined in these regulations shall have the same meaning as have been assigned to them under the Act or the Securities Contracts (Regulation) Act, 1956 (42 of 1956), or the Depositories Act, 1996 (22 of 1996), or the Companies Act, 2013 (18 of 2013), or Prevention of Money Laundering Act, 2002 (15 of 2003) or any rules or regulations made thereunder or any statutory modification or re-enactment thereto, as the case may be.”
II. In regulation 7, after sub-regulation (4), the following new sub-regulation shall be inserted, namely,
“(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.”
III. In regulation 14, the words and symbol “; as prescribed by the Board and” shall be omitted.
IV. In regulation 15,
(i) after the clause (d), the following new clause shall be inserted, namely, –
“(da) KRA shall carry out an independent validation of the KYC records uploaded onto its system by the intermediary in such a manner as specified by the Board from time to time.”
(ii) in clause (e), the word “Rules” shall be replaced with the words and symbols “rules made under the Prevention of Money Laundering Act, 2002 (15 of 2003)”.
(iii) in clause (k), the words “as prescribed by the Board” shall be replaced with the words “as specified by the Board from time to time”.
(iv) after clause (o), the following new clause shall be inserted, namely, –
“(p) KRA shall maintain an audit trail of any upload/ modification /download regarding the KYC records of each client.
V. In regulation 16, after clause (d), the following new clause shall be inserted, namely, –
“(e) The intermediary shall integrate its systems with the KRA to facilitate seamless movement of KYC documents to and from the intermediary to the KRA.”
VI. In regulation 18, in sub-regulation (2), in clause (a), the words “as prescribed by the Board” shall be replaced with the words “as specified by the Board from time to time”.
VII. In schedule I, in Form A, in Part I, in clause 1.10, after the words “practicing chartered accountant”, the words and symbols “having a valid certificate of practice under sub section (1) of section 6 of the Chartered Accountants Act, 1949 (38 of 1949)” shall be inserted.
AJAY TYAGI, Chairman
[Advt.-III/4/Exty./619/2021-22]
Footnote:
1. The Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011 were published in the Gazette of India on 2nd December, 2011 vide No. LAD-NRO/GN/2011-12/29/36772.
2. The Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011 were subsequently amended on –
(a) 22nd March, 2013 by the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2012-13/35/6998.
(b) 13th March, 2014 by the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2013-14/46/522.
(c) 11th August, 2014 by the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} (Second Amendment) Regulations, 2014 vide No. LAD -NRO/GN/2014-15/05/23483.
(d) 8th December, 2016 by the Securities and Exchange Board of India (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2016 vide No. SEBI/LAD/ NRO/GN/2016-17/023.
(e) 6th March 2017, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/2016-17/037 read with 29th March 2017, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide Notification No. LAD-NRO/ GN/2016-17/038.
(f) 17th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide Notification No. SEBI/LAD-NRO/GN/2020/10.
(g) 3rd August, 2021 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021 vide Notification No. SEBI/LAD-NRO/GN/2021/30.
