SEBI on December 2nd ,
2011 issued guidelines for KYC Registration Agencies and said wholly-owned
subsidiaries of stock exchanges and depositories would be eligible able to act
in such a role.
The Securities and Exchange Board
of India (SEBI) has asked know your customer, or KYC, registration agencies
(KRAs) to ensure interoperability amongst themselves. This is aimed to avoid
duplication of KYC process with every intermediary, a mechanism for
centralisation of KYC records in the securities market. An intermediary has to
perform the initial KYC of its clients and upload the details on the system of
the KRA (KYC Registration Agency). When the client approaches another
intermediary, the intermediary can verify and download the client’s details
from the system of the KRA.
Besides, wholly-owned
subsidiaries of depositories, other market intermediaries and Self Regulatory
Organisations would also be able to secure certificate for initial registration
as KRA. The KRAs can, in co-ordination with each other, prepare operating
instructions for implementing requirements under the guidelines and share data
on KYC documents. KRA will be responsible for storing, safeguarding and
retrieving the KYC documents and submit to the board or any other statutory
authority as and when required. Such agencies will also have to a compliance
officer who shall be responsible for monitoring the compliance of rules and
regulations issued by SEBI and the central government for redressal of client’s
grievances.
Market intermediaries have been
directed to upload KYC information of clients on the KRA system and send the
original data to them. An applicant for KRA status must also have a net worth
of Rs 25 crore and have expertise for technology and systems and safeguards for
maintaining data privacy and preventing unauthorised sharing of data.
KRAs would be eligible for
applying for permanent registration three months before the expiry of the
period of certificate of initial registration. SEBI has also made provisions
for inspections of KRA regarding books of accounts, records, infrastructure,
documents and procedures.
The Securities and Exchange Board of India (KYC (Know Your
Customer) Registration Agency) Regulations, 2011, came into effect from 2 December
2011.
Click here to view the regulation
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