SEBI has decided to allow sharing of KYC information of its regulated entities with those regulated by others — RBI, IRDA, PFRDA and FMC.

This follows the announcement in the Union Budget regarding introduction of uniform KYC norms and inter-usability of the KYC records across the financial sector.

SEBI has also allowed the system of KYC registration agency (KRA) to be connected with any central KYC registry authorised by the Central Government for the purpose of collation and sharing of the KYC information in the financial sector.

Good step

Jimmy Patel, CEO, Quantum Mutual Fund said, “It is a good step from a customer perspective. However, there are concerns regarding whether banks and insurers will share their databases and in a standard format. Also needs to be seen if in-person verification of customers is being done by those regulated by others and, if the answer is no, then as to who will do it?”

Experts said brokers will have it easy going forward. “Earlier a broker had to take two sets of KYC documents for clients wanting to trade in both equities and commodities. Now he has to take only one,” said a senior official of a SEBI registered depository.

“However, the whole financial sector runs the risk of any person getting a fraudulent KYC done with one intermediary of one regulator and wreaking havoc elsewhere. It is important that proper due diligence is exercised while doing the KYC.”

The Union Budget also proposed the introduction of one single operating demat account so that Indian financial sector consumers can access and transact all financial assets through one account.

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