SEBI makes KYC easier for accessing the stock market
If a client's records can't be verified, they won't be allowed to do more transactions in the stock market until their information is confirmed
The Securities and Exchange Board of India (SEBI) has made it easier for people to start investing in the stock market by simplifying the KYC (Know Your Customer) process. KYC is a way to confirm a person's identity and address. SEBI has asked agencies that handle KYC to check important details of clients' documents within two days of receiving them, starting from September 1. This quick verification will help new clients join the stock market more smoothly.
To protect investors and make it easier for them to trade in the stock market, SEBI has made it possible for clients to open accounts and start trading as soon as their KYC process is finished. The KYC process involves proving who you are and where you live. Having a Permanent Account Number (PAN) is mandatory for anyone who wants to participate in the stock market.
SEBI has set rules for agencies that handle KYC to make sure they check clients' documents properly. These agencies and stock market intermediaries have to work together to share documents and verify information quickly.
Here's what SEBI's guidelines say:
1. KYC agencies need to check clients' documents, including PAN, PAN-Aadhaar linkage, name, address, mobile number, and email, within two days of receiving them.
2. If a client's records are exempt from PAN, the agencies still need to verify the client's name, address, mobile number, and email. Only records verified through official databases, like the Income Tax Department's PAN database and Aadhaar documents, will be considered valid.
3. For clients who haven't submitted their Aadhaar as part of KYC, the agencies have 90 days to verify their records starting from September 1, 2023.
If a client's records can't be verified, they won't be allowed to do more transactions in the stock market until their information is confirmed. From September 4 onwards, investors with incomplete data won't be able to trade.
Stockbrokers and KYC agencies must work together to ensure they have all the required validated data from their customers. The stock exchanges and depositories will also help make sure that KYC agencies and brokers have the necessary information, so investors can keep trading and using their accounts.