Realizing the value of KYC information of the consumers, SEBI has advised exchanges and depositories to make it mandatory for all the current participants to update their clients’ six KYC attributes just before 30th September 2021. Depositories and exchanges have released a deadline for all the participants to guarantee the directions are complied with with no any delay. Since the earlier deadlines have currently been extended two instances we do not anticipate the deadline to be extended additional. For new consumers these KYC information are to be collected just before the account is opened. The six information necessary for KYC are PAN, name, address, mobile quantity, e-mail id and monetary information. If KYC is not updated the broker will have to mark the account as dormant till the KYC is updated.
A extended time back, these 6 KYC information have been not mandatory as aspect of KYC. After witnessing the monetary frauds and contemplating the “prevention of money laundering act”, SEBI and exchanges made all these 6KYC attributes mandatory one by one at unique time intervals.
It is also advisable to guarantee the PAN and Aadhaar are linked for all the current consumers as early as achievable for the reason that at some point of time the linking will turn into mandatory. As a matter of truth the deadline for the linking of PAN with Aadhaar had been set as 30th September. But now the deadline has been extended till March 2022. If the linking is not completed in the stipulated time the PAN will be deactivated resulting in the clients’ account becoming dormant.
The value of the nomination facility for trading and demat account holders is also getting recognized by the regulator SEBI. Therefore, it has been made mandatory for the broker to take in writing from the new and current consumers their consent for their want to avail the facility of nomination. If the client opts for availing the nomination facility the information of the nominee must be obtained from the consumers and the information obtained must be captured in the records maintained by the broker. Participants have to gather the nomination consent mandatorily with impact from 1st October 2021 for new accounts whereas for current consumers the deadline is 31st March 2022.
The regulator has also realized the inconvenience a client might have to go by means of in having the KYC updated physically. Keeping this in consideration the regulator has permitted the digitalization of KYC with a specific set of suggestions. Participants are creating digital KYC systems by following the suggestions issued by SEBI. This will facilitate the consumers to update the information with no going to the Broker. Most of the brokers have currently supplied digital KYC platforms to their consumers to facilitate the updation of their KYC digitally.
We must all appreciate the initiative taken by the regulator SEBIi for the reason that the above actions are eventually for the advantage for all the consumers. These actions will go a extended way in minimizing the clients’ danger and save them from any sort of fraud in their account.
(Mayank Kaushik, Lead Digital Marketing, Trustline Securities. Views expressed are the author’s personal.)