Securities and exchange board of India (SEBI), has launched India’s first central Know Your Client (KYC) registration agency for the capital market. This KYC registration agency is supposed to maintain the KYC records of investors centrally, on behalf of capital market intermediaries registered with SEBI. The main aim of introducing this agency is to avoid duplication of work and to make the overall process simple.
“As per the new guidelines, an intermediary shall perform the initial KYC of its clients and upload the details in the KRA system. Thus, when a client approaches another intermediary, it can verify and download the client’s KYC details from the KRA system. Further, any subsequent changes in demographic details of an investor across various intermediaries can be updated by simply updating the record maintained with the KRA,” said a media statement.
SEBI has plan for more KYC registration agencies to carry out the process. “We don’t have any identified number or ceiling beyond which we will not permit. We will go by the idea of how fit and proper they are. SEBI is obviously very keen to have multiple KYC registration agencies. We don’t want single agency. Going by the competition, my feeling is, that there won’t be too many registration agencies,” said Mr U.K. Sinha, Chairman, SEBI.
SEBI is in talk with other regulators in the financial sectors to set up a single central KYC registration agency. “The talks to other regulators are in a preliminary stage right now. They have their own requirements. When the SEBI KRA system is stabilized then we can move forward to speaking to the other regulators,” said Mr Sinha.