Markets regulator Securities and Exchange Board of India (Sebi) on Tuesday said that it has decided to relax Know Your Customer (KYC) norms to simplify the risk management framework. The markets regulator issued an updated notification on the master circular dated October 12.

Sebi circular dated October 12, 2023, has specified the Risk Management Framework at KRAs ((KYC Registration Agencies) wherein the attributes for verification by KRAs have been mentioned. Based on the feedback received from the stakeholders in the securities market and for ease of transacting by clients, the provisions of the Master Circular dated October 12, 2023, have been reviewed and it has been decided to simplify the risk management framework, the markets regulator said in an official release.

In the revised circular, Sebi said that KRAs shall verify the client’s Permanent Account Number (PAN), name, and address within two days of receiving KYC records.

It further added that the client’s records verified by KRAs with official databases (such as the Income Tax Department database on PAN, Aadhaar XML, Digilocker or M-Aadhaar) shall be considered ‘validated records’.

Sebi also informed that the exchanges, depositories and intermediaries concerned should complete the necessary technical change in their systems by May 31, 2024.

Last year, on October 12, the capital markets regulator released a master circular on KYC rules for investors to enable users to access all the applicable circulars and directions in one place.

This master circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market,” the circular read.