SEBI mandates Audit Trail of client’s KYC Records, Amends KYC Registration Agency Regulations [Read Notification]

The Market Regulator Securities and Exchange Board of India (SEBI) has notified the new provision in respect of the Intermediary to integrate its systems with KRA to facilitate seamless movement of KYC documents to and from the intermediary to the KRA.

The Board has notified the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} (Amendment) Regulations, 2022 which seeks to amend Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations, 2011.

In regulation 2, in sub-regulation (1), after clause (d), the following new clause shall be inserted, namely, – “(da) “change in control”, in relation to a KRA, means  if its shares are listed on any recognised stock exchange, change in control within the meaning of regulations framed under clause (h) of sub-section (2) of section 11 of the Act; in any other case, change in the controlling interest.

In regulation 7, after sub-regulation (4), the following new sub-regulation shall be inserted, namely, “(5) Where the KRA proposes change in control, it shall obtain prior approval of the Board for continuing to act as such after the change.”

In regulation 15, after the clause (d), the following new clause shall be inserted, namely, “(da) KRA shall carry out an independent validation of the KYC records uploaded onto its system by the intermediary in such a manner as specified by the Board from time to time.” In clause (e), the word “Rules” shall be replaced with the words and symbols “rules made under the Prevention of Money Laundering Act, 2002 (15 of 2003)”. In clause (k), the words “as prescribed by the Board” shall be replaced with the words “as specified by the Board from time to time”.

In regulation 16, after clause (d), the following new clause shall be inserted, namely, the intermediary shall integrate its systems with the KRA to facilitate seamless movement of KYC documents to and from the intermediary to the KRA.

In regulation 18, in sub-regulation (2), in clause (a), the words “as prescribed by the Board” shall be replaced with the words “as specified by the Board from time to time”

To Read the full text of the Order CLICK HERE

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