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SEBI has asked KYC registration agencies (KRAs) to validate all KYC details of investors including mutual funds by January 1, 2023. This activity will commence from July 1, 2022.
KRAs have been asked to independently validate clients where investors have used Aadhaar as an officially valid document (OVD). In absence of Aadhaar, KRAs will have to store such records. This data cannot be verified until investors provide their Aadhaar.
If KRAs find any discrepancy, they will have to intimate investors within 2 working days by post or email. Investors whose KYC record will be found invalid during the process will not be allowed to transact in the securities market, SEBI said.
The validation process will require KRAs to authenticate the Aadhaar of every investor through the UIDAI and the PAN using income tax database. Mobile number and email validation will also be validated.
Further, SEBI has directed KRAs to generate an ID for every investor whose validation is completed successfully. This ID, the regulator said, can be used by investors to start new investments without going through the KYC process again.
"On successful completion of KYC validation, a unique client identifier called KRA identifier shall be assigned by KRA to the client and such KRA identifier may be used by the client for opening of account with any other intermediary, without repeating the KYC process," SEBI said in a circular.
Currently, investors can use CKYC number to invest across capital market products. However, investors will have to quote KRA validation number along with CKYC number to invest in capital market products including mutual funds and PMS.
