SEBI For Doing Away Of Fresh KYC For Opening Of New Accounts In Securities Market
Posted on: 23 Mar 2016 10:05:08
23 March 2016 Current Affairs: Sebi is mulling doing away with the requirement of a fresh KYC (Know Your Client) for opening of new accounts in securities market if the investor has got a bank account. Under the proposed move that may take a couple of months to come into effect, the market intermediaries - be it brokerage firms, mutual funds or any other Sebi-registered entity - would rather be allowed to use KYC checks conducted by the bank with which the investor has got an account. Sebi is currently discussing the proposal with the RBI and the government, and a final decision would depend on these consultations, as also on various regulatory aspects, a top official said, while adding that the central bank has in-principle agreed to the proposed move.According to Sebi Chairman U K Sinha, the common KYC for the entire financial sector is also in works, but the regulator in the meantime is considering allowing banks' KYC for the securities markets. After Sebi's recent board meeting here, the regulator has created KYC Registration Agency or KRA and now one KYC is enough for all intermediaries in the securities markets. Already, Aadhaar has made it very simple for KYC procedures to be conducted. Now, our next target is why can't we use the banks' KYC because all the transactions of securities market, except mutual fund transactions up to Rs 50,000, have to take place through banks. Therefore, we can provide that since a person has a bank account that was opened after a KYC, there would not be any need for a fresh KYC to be done. We have taken up this matter with the RBI and with the government. RBI is also in-principle agreeable to it .This would mean that if a person has a bank account, he would not need to go through a fresh KYC for any securities markets account.
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