Dec 26, 2011

Guidelines to SEBI KYC Registration Agency Regulations, 2011

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Guidelines to SEBI KYC Registration Agency Regulations, 2011 and In-person Verification

SEBI recently vide its circular no. MIRSD/Cir-23/2011 dated December 2, 2011 has provided with KRA regulations. For the effective implementation of these KRA regulations and In-person Verification, the SEBI has issued guidelines vide its circular no. MIRSD/Cir- 26 /2011 dated 23.12.2011.

The key provisions of the circular are as below:

  1. Guidelines for Intermediaries:

    1. The circular has provided for the procedure to be followed by the intermediaries for KYC and uploading of information of KYC of new and existing clients on systems of KRA.
    2. The guidelines further provide for maintenance of records by intermediaries in electronic form and require intermediaries to have internal control to ensure security and authenticity of data.
  2. Guidelines for KRA:

    1. The circular provides for maintenance of KYC information in data and image form and requirement of confirmation from clients of information uploaded.
    2. It further provides for KRA to have systems to avoid duplicity and controls to safeguard security of data.
    3. A proper audit trail for upload / modifications / downloads of KYC data to be maintained and to have audit of systems by independent auditor and report of audit and actions taken to be submitted to Board of Directors and to SEBI.
  3. In-Person Verification (IPV)

    SEBI has from time to time issued circulars to stock brokers and DPs, now in regard to the uniformed provision of KYC procedures, IPV requirements are also harmonized.

    1. As per this circular, all the intermediaries to carry out IPV of their clients and to record name of the person doing KYC with designation, organization, signatures and date on the KYC form.
    2. The circular allows the intermediary to rely on IPV done by another SEBI registered intermediary.
    3. Requirement in case of Mutual funds is also provided.

    As per the circular, the KRA system to be applicable for all new client accounts opened from 01.01.2012. Leverage for new accounts opened from 01.01.2012 to 31.01.2012 is provided for uploading of KYC data on the KRA systems upto 15.02.2012. For all new accounts opened from 01.02.2011, the information to be sent within 10 working days.

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