Sebi to consider allowing bank KYC for securities market

The proposal, however, will take couple of months to come into effect. With this, the market intermediaries like brokerage firms, mutual funds or any other Sebi-registered subsidiary, would be allowed to use KYC checks conducted by the bank with which the investor has got an account.

Market watchdog SEBI is considering eliminating the requirement of KYC (Know Your Client) for opening of new accounts in securities market if the investor already has got a bank account.
The proposal, however, will take couple of months to come into effect. With this, the market intermediaries like brokerage firms, mutual funds or any other Sebi-registered subsidiary, would be allowed to use KYC checks conducted by the bank with which the investor has got an account.
Know Your Client has been tabled before Reserve Bank of India and the government and a final decision will be made by Sebi on the basis of these consultations. According to reports, the central bank has in-principle agreed to the proposed move.
This move would help eliminate duplication efforts and further ease the KYC procedures, as having an account is such mandatory field for every investors in the mutual funds category.
Sebi has already designed the KYC procedures for the securities market and a single KYC is sufficient for any kind of account with any of the market intermediary, according to reports. The regulator also believes that the new Aadhaar law will be a great push for KYC procedures, while the Unique Identification Number has already made it flexible.
The process to get registered?
One needs to have internet access and then key in Aadhar number and a registered mobile number to log into the specified KRA website giving further details such as PAN (Permanent Account Number), email ID, Bank name, and date of birth, your tax status and mode of holding.
After keying in these details, KYC compliance status will be displayed. If not KYC compliant, one will be required to add the registered mobile number and Aadhaar number. After which a onetime pin is sent to the user’s registered mobile number, this PIN will be used to complete the Aadhar authentication process. Post this, a self-confirmed copy of e-Aadhaar will be required to be uploaded by the user and a consent declaration will be displayed on the screen.
On completion of this process, Aadhaar and registered mobile number would be confirmed with the Aadhaar database of the Unique Identification Authority of India (UIDAI). Upon successful verification, the screen will display the eligibility to e-KYC in order to carry out transactions in mutual funds.
Is e-KYC mandatory?
The Supreme Court in October 2015, directed that the usage of the Aadhar Card is voluntary and thus optional, SEBI followed with a circular confirming this.
It is important to note that SEBI allows investment of up to Rs 50,000 per financial year for each mutual fund that has the Aadhaar based e-KYC using and one will have to undertake an in-person verification for investments that exceed this value per financial year.