Making Know-Your-Client process easier for investors, Sebi today cleared a proposal to allow various market entities such as brokers and mutual funds to get investor details from centralised KYC agencies, rather than carrying out a fresh KYC verification procedure.
Presently, there is an option available to a market intermediary that it may access the centralised KRA (KYC Registration Agency) system in case of a client who is already KYC compliant, or may also carry fresh KYC process.
At a board meeting here today, Sebi decided to do away with the second option of fresh KYC processing being carried out, if the concerned investor has once gone through the KYC procedure with any of the registered intermediaries.
Citing that the KRA system "is working well", Securities and Exchange Board of India (Sebi) approved amendments to the KRA regulations to bring in these changes.
However, as provided in under the norms, an intermediary can undertake enhanced KYC measures commensurate with the risk profile of its clients, Sebi said.
"Sebi KRA system has evolved and stabilised over a period of two years and with inter-operability in place, there is easy exchange of KYC data among five Sebi registered KRAs," the regulator said.
KRA are institutions which maintain KYC details of investors. Wholly-owned subsidiaries of stock exchanges and depositories are eligible able to act as KRA.
In December, last year, Sebi had simplified investor account opening form by doing away with details about income and occupation of the applicant for the purpose of centralised KYC registration agency.
Sebi had said that certain information about applicants like gross annual income details, occupation, permanent address proof and whether the applicant is a politically exposed person are not required for the centralised KRAs.