SEBI has accepted e-KYC service offered by Unique Identification Authority of India (UIDAI) as a valid process for KYC verification. To avail this facility, the investors have to authorize intermediaries to access their Aadhaar data through UIDAI system.
The e-KYC service offered by UIDAI enables individuals to authorise service providers to receive electronic copy of their proof of identity and address. The service makes KYC instantaneous, totally secure and paperless while enhancing privacy of data.Presently, e-KYC is free of cost. However, UIDAI can charge for its authentication service in future.
The SEBI circular says, "In consultation with UIDAI and the market participants, it has now been decided to accept e-KYC service launched by UIDAI also, as a valid process for KYC verification. The information containing relevant client details and photograph made available from UIDAI as a result of e-KYC process shall be treated as sufficient proof of Identity and Address of the client. “
Besides mutual funds, SEBI has allowed stock exchanges, brokers, depository participants, portfolio managers, alternative investments funds and collective investment schemes to accept e-KYC service.
Banks and insurance companies are already using e-KYC service to carry out their KYC verification procedures.
