Sushmita Goswami | Jan 31, 2022 |
SEBI Mandates Client’s KYC Audit Trail and Amends KYC Registration Agency Regulations
The Securities and Exchange Board of India (SEBI), the market regulator, has announced a new rule requiring Intermediaries to interface their systems with KRA in order to promote seamless transit of KYC papers from the intermediary to the KRA.
The Securities and Exchange Board of India KYC (Know Your Client) Registration Agency (Amendment) Regulations, 2022 have been notified by the Board, and they seek to update the Securities and Exchange Board of India KYC (Know Your Client) Registration Agency Regulations, 2011.
After clause (d) in sub-regulation (1) of regulation 2, the following new clause shall be inserted: “(da) “change in control” in regard to a KRA means “change in control” within the meaning of regulations framed under clause (h) of sub-section (2) of section 11 of the Act if its shares are listed on any recognized stock exchange; otherwise, “change in the controlling interest.”
After sub-regulation (4) in regulation 7, insert the following new sub-regulation: “(5) Where the KRA proposes a change in control, it shall get prior approval from the Board for continuing to operate as such after the change.”
“(da) KRA shall carry out an independent validation of the KYC records uploaded onto its system by the intermediary in such a way as prescribed by the Board from time to time,” shall be included after clause (d) in regulation 15. The words and symbols “rules made under the Prevention of Money Laundering Act, 2002 (15 of 2003)” shall be substituted for “rules made under the Prevention of Money Laundering Act, 2002 (15 of 2003)” in clause (e). The words “as prescribed by the Board” in clause (k) shall be changed with “as specified by the Board from time to time.”
The following additional clause will be introduced after clause (d) in regulation 16, namely, the intermediary shall interface its systems with the KRA to permit seamless transmission of KYC papers from the intermediary to the KRA.
The words “as prescribed by the Board” in clause (a) of rule 18 shall be substituted with the words “as specified by the Board from time to time.”
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