Top
Millennium Post

Sebi scraps physical filing of KYC documents to KRAs

To streamline the process of 'Know Your Client' procedures, market regulator Sebi has done away with the submission of physical documents by investors to the KYC Registration Agencies (KRAs) in favour of the electronic format only.

The intermediaries, including mutual funds, would need to submit scanned copies of investor documents to the KRAs and retain the physical documents with themselves. However, the physical documents would need to be submitted, whenever KRAs demand them.

So far, KRAs - which are responsible for maintaining KYC records across all Sebi-regulated entities - were required to maintain the original KYC documents, both in physical as well as electronic formats.To minimise the physical paperwork, Sebi has now amended its KRA regulations, allowing the market intermediaries to keep the original investor documents in physical form with them and submit only the scanned copies to the KRAs.

'The intermediary shall perform the initial KYC/due diligence of the client, upload the KYC information with proper authentication on the system of the KRA, furnish the scanned images of the KYC documents to the KRA, and retain the physical KYC documents,' Sebi said.Even in cases of any change in investor KYC details, the market intermediaries would retain the updated documents in physical form with themselves.

As per the new norms, all market intermediaries and agents (RTI and STA) acting on behalf of mutual funds would also have to submit only scanned KYC documents to KRAs.However, the intermediaries and mutual funds would have to furnish the physical KYC documents or authenticated copies, whenever desired by the KRAs, Sebi said.

   
WATCHDOG TO HEIGHTEN SURVEILLANCE OF DERIVATIVES MARKET


Market regulator Sebi plans to put in place a stronger and more effective surveillance system in the next fiscal 2013-14, by way of greater checks against money laundering and an overhaul of its regulations for various market entities and trade activities.

The measures proposed to be taken in the fiscal beginning next month include enhanced surveillance of derivatives market, first-stage monitoring by brokers, stronger audit mechanism for market entities and review of anti-money laundering and terror combating funding norms.Besides, Sebi also plans to bring in guidelines to address conflict of interest for credit rating agencies, introduce regulatory framework for foreign intermediaries soliciting business from investors in India and put in place a centralised KYC framework for the entire financial sector.

The proposed steps are part of Sebi's budget proposals for the year 2013-14, which have been approved by its board and would be implemented during the course of the year.

One of the top priorities identified by Sebi for 2013-14 would be 'protecting the integrity and safety of the market through a stronger and more effective surveillance mechanism and by strengthening the inspection process of intermediaries', a senior executive said.

Sebi is also planning to strengthen its manpower in the next fiscal, besides greater efforts towards training and skill building of existing staff members.

The regulator would also strengthen its Data Warehousing and Business Intelligence System (DWBIS), the project which has been initiated in phases to generate reports to identify, detect and investigate aberrations and market abuses that undermine market integrity.

In its budget proposals, Sebi also said that it is necessary for the intermediaries to maintain high levels of compliance with the stipulated norms.
Next Story
Share it