The SEBI (Securities and Exchange Board of India) has published new rules for KYC Registration Agencies (KRAs), requiring such agencies to independently check all customers' KYC information beginning July 1. The decision comes after SEBI issued new guidelines in January requiring KRAs to conduct an independent validation of KYC information submitted to their system by Registered Intermediaries (RIs).
The SEBI developed a standard KYC application form in January 2012 to improve consistency in preserving and processing information relevant to mutual fund investors. A KRA (KYC Registration Agency) is charged with the job of preserving KYC records to make the process of gathering information more efficient and central.
The agencies would independently authenticate records of current and new clients whose KYC was completed using Aadhaar as an Officially Valid Document (OVD).
Clients who completed KYC using non-Aadhaar OVD would have their data confirmed only after getting their Aadhaar number.
KRAs will continue to serve as the repository of KYC data in the securities market, with responsibility for maintaining, preserving, and retrieving KYC papers.
During the validation process, KRAs will authenticate Aadhaar details using Unique Identification Authority of India (UIDAI) authentication, PAN details using the Income Tax database, and cellphone number and e-mail ID details using one-time password validation. This is only relevant if the client's cellphone number and e-mail ID have not been seeded with Aadhaar.
KRAs will closely monitor and instantly notify the relevant RIs of any deficiencies/inadequacies in the client's KYC papers that are discovered during validation. The KYC records of new clients, who
have used Aadhaar as an officially valid document, will be validated within two days of receipt of KYC records by KRAs. The records of all existing clients will be validated within 180 days from July 1.