TaxTMI 
TaxTMI 
Review of validation of KYC records by KRAs under Risk Management Framework
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....ing clauses of the master circular stand modified: 2.1. Para 96 shall read as follows: As a part of risk management framework, the KRAs shall verify the following attributes of records of all clients within 2 days of receipt of KYC records: a. Permanent Account Number (PAN) b. Name c. Address 2.2. Para 100 shall be read as under: The records of those clients in respect of which all attributes mentioned in para 96 / 97 above are verified by KRAs with official databases (such as Income Tax Department database on PAN, Aadhaar XML / Digilocker / M- Aadhaar) and PAN-Aadhaar linkage has also been verified as referred to in Rule 114 AAA of the Income Tax Rules, 1962 shall be considered as Validated Records. 3. The Exchanges / Depositories / concerned intermediaries shall complete the necessary technical change in their systems by May 31, 2024. 4. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 17 of the SEBI{KYC (Know Your Client) Registration Agency}Regulations, 2011 to protect the interests of investors in securities and to promote t....
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...., nature and purpose of client relationships and examine the probabilities of any illegal wrongdoings. Additionally, KYC helps to make sure that all transactions are legitimate and transparent. Updating KYC details from time to time with the intermediaries, aids the investors in receiving timely information. 6. Can intermediaries seek additional KYC information? Yes, client needs to furnish additional KYC Information as required under the law. 7. What is Part I and Part II of the account opening form (AOF)? Client needs to fill the account opening form at the time of commencement of an account based relationship. Part I of the AOF is the KYC form in which the basic details about the client is captured. Part II of the form pertains to the additional KYC information as may be sought separately by the financial intermediary such as asset management company, stock broker, depository participant opening the client's account. 8. Is there a uniform KYC form to be used for account opening? Yes. KYC templates provided by Central Registry of Securitisation Asset Reconstruction and Security Interes....
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....)? The following documents are acceptable as PoI and PoA: i. the passport; ii. the driving licence; iii. proof of possession of Aadhaar number; iv. the Voter's Identity Card issued by Election Commission of India; v. job card issued by NREGA duly signed by an officer of the State Government; vi. the letter issued by the National Population Register containing details of name address; or vii. any other document as notified by the Central Government in consultation with the Regulator. 17. Which documents are acceptable as deemed OVD for POA? In case the document furnished by the client does not contain updated address, the following documents (or their equivalent e-documents thereof) are acceptable for the limited purpose of proof of address, provided that the client submits updated officially valid document (or their equivalent e-documents thereof) with current address within a period of three months of submitting the following documents: i. utility bill which is not more than two months old of any service provider&nb....
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.... 23. Can a minor invest in securities market? A minor needs a guardian to make investments in securities market. Further, a document proving the relationship between the minor and the guardian is to be provided. 24. Can a third party address be used as correspondence address? Yes. A client can authorize in writing stating the relation with the third party to capture address of a third party as a correspondence address, provided that all prescribed 'Know Your Client' norms are also fulfilled for the third party. 25. Is in-person verification required to be carried out if the intermediary relies on the records of client due diligence (KYC) carried out by a third party? No. SEBI registered intermediary can rely on the in-person verification carried out by a third party, if it obtains the records or the information of the client due diligence, including in-person verification. 26. What is digital KYC? Digital KYC means capturing live photo of the client and officially valid document or the proof of possession of Aadhaar, where offline verification cannot be carried out along with the latitude and longi....
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.... cheque 32. Can a Non Resident Indian / Person of Indian Origin (NRI / PIO) transact in securities market? Yes, subject to RBI and FEMA guidelines. 33. What are the documents to be provided for NRI / PIO? For NRI / PIO, copy of passport / Persons of Indian Origin (PIO) Card / Overseas Citizenship of India (OCI) Card and overseas address proof are required. 34. Is it mandatory to link PAN with Aadhaar for NRIs? As per the Income Tax Department notification, NRIs who do not have Aadhaar number are exempted from linking of PAN-Aadhaar provided they update their residential status as Non-Resident in the Income Tax portal. 35. Is PAN-Aadhaar linking exemption granted automatically to NRIs? No. NRIs who do not have Aadhaar are exempted from linking of PAN-Aadhaar only on updating their residential status as Non-Resident in the Income Tax portal. 36. Is an NRI permitted to carry out digital KYC? Yes. The rules for digital KYC for NRI is similar to that of domestic clients. 37. Can SEBI registered intermediary, while entering into account based relationship, rely on th....
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....s the reason and implication, if any? Each KYC record is unique and tagged with a single PAN. The client whose KYC record is validated by a KRA has portability of KYC record and the client need not undergo the KYC process again when he / she approaches another intermediary in securities market. 45. Can transactions be allowed in securities market in case of existing clients, as on March 31, 2024, where KYC attributes are not verified? Yes. The existing clients, as on March 31, 2024, in whose respect KYC attributes cannot be verified by the KRAs shall be allowed to exit (sale / redemption, etc.) from existing investment in securities market subject to adequate due diligence by intermediaries. The client's email shall be considered as an optional attribute. 46. How can a client find out if any intermediary has downloaded / modified his KYC record? The client gets an intimation from the respective KRA as and when his / her KYC is downloaded / modified by any intermediary. 47. Does a client who has done his KYC with a DP need to do KYC again if he wishes to invest in mutual funds? The clients w....