The deadline for KYC registration agencies (KRAs) to revalidate the KYC of mutual fund investors, who have used Aadhaar as an officially valid document (OVD) for KYC before 1 November 2022, ends on 30 April 2023.
The Securities and Exchange Board of India (Sebi) has already extended this deadline multiple times. According to its last circular, KYC records of all existing clients (who have used Aadhaar as an OVD) shall be validated within a period of 180 days from 1 November 2022, extending the cut-off date from 1 July 2022.
As things stand, the market regulator has not yet extended the cut-off date, so the deadline remains 30 April 2023 for now.
Sebi, in its first circular on this matter in April last year, stated that “clients whose KYC records are not found to be valid by KRA after the validation process shall be allowed to transact in securities market only after their KYC is validated”.
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In case, the KRAs are yet to reach out to investors for re-validation, mutual fund distributors can ask their investors to re-validate the KYC using Aadhar-based XML or e-Aadhaar or virtual ID (VID).
Once the re-validation is done, Sebi stated that the KRA shall assign a unique client identifier to the investor. This “KRA identifier may be used by the client for opening of account with any other intermediary, without repeating the KYC process”.
In the case of KYC based on non-Aadhar OVD, Sebi in its April 2022 circular had stated that “the KRA shall only store such records and the same would not be validated by KRAs unless Aadhaar number is provided by the client”.