The Securities and Exchange Board of India (Sebi) has taken a step towards simplifying the Know Your Customer (KYC) process by instructing KYC Registration Agencies (KRAs) to integrate their systems with the Central KYC Records Registry (CKYCRR) and commence uploading verified KYC information of clients from August 1, 2024. Previously, market intermediaries such as stock brokers and alternative investment funds were responsible for uploading KYC details onto CKYCRR due to their client account-opening relationships. However, Sebi’s recent circular has amended the master circular on KYC norms, transferring this responsibility to KRAs.
What did the new guideline say?
Sebi has issued a circular instructing registered intermediaries to continue uploading or modifying KYC information with proper authentication on the systems of KRA. Under the new guidelines, KRAs are required to upload verified or validated KYC information onto CKYCRR within seven days of receiving it from intermediaries. Sebi stated that the KRAs must integrate their systems with CKYCRR and begin uploading KYC records on CKYCRR starting from August 1, 2024. Additionally, KRAs must ensure that existing KYC records of both legal entities and individual clients are uploaded onto CKYCRR within a six-month period starting from August 1.
What does this mean for people?
Customers will no longer be required to provide KYC documents repeatedly to various financial institutions, as their authenticated information will be accessible in the centralized CKYCRR system.
What is CKYCRR?
CKYCRR serves as a unified KYC system that can be applied to various financial transactions, such as banking, mutual funds, stocks, insurance, and the National Pension System (NPS). At present, insurance companies and pension fund companies are already utilizing CKYCRR to authenticate KYC information, which opens up the possibility for mutual fund distributors to access CKYC data from these sectors. The incorporation of KRAs into CKYCRR is anticipated to streamline customer onboarding by reducing the time required to onboard new clients. If banks also begin uploading their customers’ KYC details onto CKYCRR, a single bank account could potentially serve as a comprehensive solution for investing in all financial products.