KYC revalidation of mutual fund investors: A major deadline for KYC Registration Agency (KRA) is approaching near. Less than 60 days are left for KRAs to revalidate the KYC of mutual fund investors who have used Aadhaar Card as an officially valid document (OVD) for their KYC before November 1, 2022. The last date to revalidate KYC for such MF investors is April 30, 2023.
Last year in July, capital market regulator Securities and Exchange Board of India (SEBI) had pushed forward the cut-off date from July 1, 2022 to November 1, 2022. In its circular, the regulator had stated that KYC records of all existing clients (who have used Aadhaar as an OVD) shall be validated within a period of 180 days from November 1, 2022.
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The 180-period sets April 30, 2023 as the deadline for the same. “The validation of all KYC records (new and existing) shall commence from November 01, 2022,” SEBI had said.
During the process of validation, KRAs shall validate the following details – Aadhaar through Unique Identification Authority of India (UIDAI) authentication/verification mechanism; Mobile number and e-mail ID using OTP validation (only in cases where mobile number and e-mail ID provided by client are not seeded with Aadhaar); and PAN using the Income Tax Database.
While the market regulator has granted 180 days for the revalidation of KYC records of all existing clients (who have used Aadhaar as an OVD), SEBI said that the KYC records of new clients (who have used Aadhaar as an OVD) shall be validated within 2 days of receipt of KYC records by KRAs.
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What happens if deadline is missed?
According to SEBI, 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. “In case of KYC based onnon-Aadhaar OVD, the KRA shall only store such records and the same would not be validated by KRAs unless Aadhaar number is provided by the client,” the SEBI said in a circular in April.
Once the re-validation is done, Sebi stated that the KRA shall assign a unique client identifier to the investor. “KRA identifier may be used by the client for opening of account with any other intermediary, without repeating the KYC process,” it noted.
