SEBI Chief U K Sinha has said that setting up a mechanism for uniform KYC across all financial products will take time due to procedural issues, reports ‘The Hindu Business Line’. He was speaking at an event organized by the Association of Investment Bankers of India (AIBI) in Mumbai today.
Sinha said that common KYC is a big issue for the financial services industry. He said that this issue is not conceptual but procedural. The procedural part will take some more time because all financial regulators are working on it.
SEBI chief further said that a group comprising representatives from all financial regulators like RBI, SEBI, IRDAI and PFRDA has been formed to implement common KYC.
Last month, Sinha said that SEBI is in talks with other regulators to make single KYC across all financial products a reality.
Currently, a separate KYC is needed for different financial products. For instance, separate KYCs are required for opening a bank account and investing in mutual funds.
Distributors feel that the existing complications in KYC norms are, to some extent, proving to be a deterrent for new investors to invest in mutual funds. This is a major cause of concern for the MF industry.
SEBI has already taken some steps in easing KYC norms in mutual funds by forming KYC Registration Agencies (KRA). Investors who are KYC compliant with any stock broker can invest directly in mutual funds.
Earlier this year, the Supreme Court appointed Special Investigation Team (SIT) on black money had recommended setting up a Central KYC Registry (CKYC) to link different identity proofs like PAN, Aadhaar and Passport of an individual to help track all financial transactions. Though the recommendations have been made to curb black money, it will help financial institutions like banks, fund houses and insurers to do KYC through a single window. “A central KYC Registry should be established with all law enforcement agencies, Registrar of Companies and financial institutions having access to its database,” SIT has said in its recommendations.
