Definition:

1. The process adopted for obtaining the vital information of a client is called the ‘Know Your Client’ (KYC) procedure.
2. The agency approved and registered by SEBI, in accordance to its Rule, Regulations and Bye-laws, to keep records of all the KYC details of an investor is called the KYC Registration Agency (KRA)

Purpose:

1. As per KRA (KYC Registration Agency) Regulation, 2011, released by SEBI vide its circular no. MIRSD/Cir-23/2011, dated December 02, 2011, henceforth, each investor has to provide his/her/their KYC details only once in the lifetime.

Procedure:

1. The investor may approach any intermediary, registered with SEBI, of their choice for investment purpose. For this, the investor has to open a Demat where the shares and securities are to be held by them, and/or a Trading account by which the shares and securities can be bought and sold on the Exchange platform. But before opening these accounts, the client has to undergo KYC procedure under the guidelines prescribed by SEBI as per the Prevention of Money Laundering Act (PMLA) for Anti-Money Laundering (AML).
2. The KYC Registration is a one-time process for the investors in the securities market. They need not submit KYC details every now and-than. Only the existing KYC has to be updated as and when required.
3. In case the investor has not got their KYC registered with any of the KRA prior to this, then it has to be done in accordance to the KRA Regulations, 2011 prescribed by SEBI. The existing KYC details of the client need to be verified from the concerned KRA.
4. First of all, the investor has to fulfil the KYC requirement by filling up the KYC form, affixing one passport size recent colour photograph and signature at appropriate places, and submit it along with the photocopies of the prescribed supporting documents i.e. Permanent Account Number (PAN) Card, valid Proof of Identity and valid Proof of address that are acceptable as per SEBI guidelines.
5. The employee dealing with the client should verify the details mentioned in the PAN card as per the procedure prescribed by SEBI.
6. Thereafter, the details mentioned in the KYC form as well as the photocopies of the supporting documents with its originals, should be verified as per the procedure prescribed by SEBI.
7. Only if the KYC form of the investor is found to be complete in all aspects and acceptable, the same should be accepted after conducting the ‘In-person Verification’ (IPV) of the concerned client.
8. The IPV of the client can be done only by the authorised staff member in employment of the company. No other person is valid to conduct the IPV of a client.
9. On doing the IPV of a client, the employee conducting the IPV should mention all details related to the IPV, including the employee’s own details on the KYC form and sign it for authentication.
10. After the IPV is done the KYC application and application for opening of their Demat/Trading account can be accepted from the client.
11. Thereafter, the details mentioned in the KYC application form as well as other application forms are to be entered into the respective software – KRA Software for KYC, DPM Module for Demat account and Back-office software for Trading account registration.
12. Registration of the KYC is a two-step process i.e. Maker – Checker. One employee (Maker) will be authorised to enter the KYC details in the KRA system and another employee (Checker) has to check these details that have been entered and upload the correct details onto the system.
13. After entering the KYC details into the online software system of the KRA, the KYC application form, along with its supporting documents are to be scanned and uploaded on to the online software system of KRA to be sent to the KRA along with the KYC details in electronic form.
14. Once it is uploaded, the status will show as ‘Pending with KRA’ and an acknowledgement number will be generated, which has to be mentioned on the respective KYC application form.
15. In case, there is any objection in the KYC details, the status of such account will be shown as ‘On Hold’ with the reason for the same mentioned therein.
16. This objection has to be cleared by us within 30 days by contacting the concerned client else, it will be rejected and returned back to us.
17. If the KYC application form is rejected, the whole process of KYC of the client will have to be re-submitted once again after clearing the objection mentioned earlier.
18. Once the KYC details of a client is found to be okay the KRA shall accept it and the status will be shown as ‘Accepted’.