Allows wholly owned subsidiaries of stock exchanges, depository or SRO having net worth of Rs. 25 crore to become KYC Registration Agencies (KRAs)
Mumbai: The regulator has permitted wholly owned subsidiaries of stock exchanges, depository and SROs registered with SEBI as eligible entities to become KYC Registration Agency (KRA) for a period of five years. It has also said that there should not be any conflict of interest in applicant, its associates and group companies. The KRA has to have a net worth of Rs. 25 crore.
In addition, SEBI has allowed RTAs of mutual funds also to conduct KYC. In August, SEBI had issued guidelines on uniform KYC norms by simplifying the account opening procedure.
An intermediary has to conduct KYC and upload the details on the system of (KRA) and send the original KYC documents to KRA. All intermediaries can verify the details of investors from the systems of KRA.
An intermediary has to update the database in the system of KRA in case of any changes in the status of investors. Intermediaries are not allowed to misuse or sell the data to external parties. SEBI will appoint an inspecting authority to scrutinize the books, documents, infrastructure, systems and procedures of KYC.
KRA can prepare the operating instructions in co-ordination with other KRAs. The KRA has to establish interconnectivity with other KRAs. These entities will have to appoint a compliance officer who will monitor the compliance of the act, rules and regulations, notifications, guidelines, instructions, issued by the board or the central government. The compliance officer will report to the board if he observers any non-compliance.
The move is likely to cut down costs, streamline KYC process and bring much needed relief for investors and distributors by facilitating swift transactions.
