The country's leading depositories are all set to battle it out in the newly-formed terrain of KRAs—Know Your Client (KYC) Registration Agency— that has already started the groundwork for empanelling market intermediaries.
While CDSL Ventures has become the first entity to get itself registered as a KRA, NSDL Database Management (NDML) is also at an advanced stage and is expected to go live as early as next week. CDSL Ventures and NDML are wholly-owned subsidiaries of CDSL and NSDL, respectively.
The move comes nearly one month after the Securities and Exchange Board of India (SEBI) framed the guidelines for KRA that is intended to make life simpler for investors by doing away with repeated KYC procedures.
“CDSL Ventures (CVL)... has been granted certificate of registration as a KRA by Sebi on December 28, 2011," said a BSE notice on Monday.
Manoj Vaish, MD & CEO, NDML said that they have already got the “in-principle” approval from Sebi. “We are in the process and expect to go live early next week,” he added.
According to market players, both the depositories would press the accelerator to get as many intermediaries on-board as possible since that is the only manner in which they can monetise this new venture. Also since Sebi norms mandate inter-operability if there is more than one KRA, intermediaries do not technically require to register with more than one such entity.
The KRAs are expected to charge around R50 for every KYC record maintained with them. While the cost will be borne by the market intermediary, it is believed that it will be eventually passed on to the customer. The client, however, will still stand to gain as this will be a one time exercise and even if a new account is opened with a different intermediary, the KYC process need not be done again. “A market intermediary just has to check if the KRA has the details for a particular client and if yes then the KYC procedure need not be repeated,” says Amit Majumdar, ED & chief strategy officer, Angel Broking. “The KYC process has to be done only once and