SEBI relaxes KYC norms to simplify risk management framework. Check details

Markets regulator Securities and Exchange Board of India (SEBI) on Tuesday relaxed Know Your Customer (KYC) norms to simplify the risk management framework.

Issuing an updated notification on the master circular dated October 12 last year, SEBI said the norms have been relaxed based on the feedback given by the stakeholders in the securities market and for the ease of transacting by clients.

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“Sebi circular dated October 12, 2023, has specified the Risk Management Framework at KRAs ((KYC Registration Agencies) wherein the attributes for verification by KRAs have been mentioned. Based on the feedback received from the stakeholders in the securities market and for ease of transacting by clients, the provisions of the Master Circular dated October 12, 2023, have been reviewed and it has been decided to simplify the risk management framework,” the markets regulator said in an official release.

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List of KYC norms SEBI relaxed for risk management framework:

1. According to the SEBI in the updated circular, KRAs shall verfiy the client's Permanent Account Number (PAN), name, and address within two days of receiving KYC records.
2. The client's records verified by KRAs with official databases (Income Tax Department database on PAN, Aadhaar XML, Digilocker or M-Aadhaar) shall be considered ‘validated records’.
3. The exchanges, depositories and intermediaries concerned should complete the necessary technical change in their systems by May 31, 2024.

Meanwhile, SEBI, while issuing its master circular on KYC rules last year said, “This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 17 of the SEBI KYC Registration Agency Regulations, 2011 to protect the interests of investors in securities and to promote the development of, and to regulate the securities markets.”