Securities and Exchange Board of India (SEBI) put forth the regulations for uniform Know Your Client KYC Registration Agency (KRA) on 2 December 2011. The move is expected to benefit investors as it would save them the trouble of repeating the KYC process while investing in various financial products.
The regulator allowed stock exchanges, depositories or any other Self Regulatory Organisation (SRO) to form wholly-owned subsidiaries that could be registered as a KRA. SEBI will consider applications to grant certificates of initial registration to a wholly owned subsidiary of a recognised stock exchange that have a nation-wide network of trading terminals, a wholly owned subsidiary of a depository or any other intermediary registered with the Board.
The certificates of initial registration of KRA granted under sub-regulation would be valid for a period of five years from the date of its issue to the applicant.
What is KRA?
A KRA will make life simpler for investors who have to go through the entire KYC procedures each time they want to register with a new broker or a fund house. The role of a KRA will involve completion of the KYC procedures for a client and make it available to all capital market intermediaries that avail of its services. If there is more than one KRA, inter-operability will have to be put in place to avoid duplicacy. The KRA will be required to maintain a net worth of at least R25 crore on a continuous basis.
SEBI mentioned that the KRA will be responsible for storing, safeguarding and retrieving the KYC documents and it will also have to retain the original KYC documents of the client, in both physical and electronic form.
KRAs have the responsibility to appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines and instructions issued by the board or the central government and for redressal of client’s grievances. The compliance officer will immediately and independently report to the Sebi board any non-compliance observed by him.
No comments:
Post a Comment