New Delhi: SEBI on Tuesday issued a detailed circular regarding the process to be followed for Aadhaar-based electronic KYC exercise for domestic investors.
The circular mentions about the requirements to be fulfilled by entities registered with the UIDAI as KYC User Agency (KUA) as well as for sub-KUA.
For such KYC process, there would be two options online portal and assisted investor e-KYC processes.
SEBI-registered intermediaries and mutual fund distributors, who want to undertake Aadhaar authentication services through KUAs, should enter into an agreement with anyone KUA. They should also get themselves registered with UIDAI as sub-KUAs.
Under the Prevention of Money Laundering Act (PMLA), entities in the securities market that are notified by the central government can undertake Aadhaar authentication.
"SEBI-registered intermediaries for reasons such as online onboarding of clients, customer convenience, increased efficiency and reduced time for client onboarding would prefer to use Aadhaar based e-KYC facility to complete the KYC of the client," the circular said.
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For the appointment of such intermediaries and mutual fund distributors as sub-KUAs, the KUA concerned would send list of proposed names to SEBI. The latter would forward the list to UIDAI for onboarding.
"An agreement will be signed between KUA and sub-KUA, as prescribed by UIDAI. Sub-KUA shall also comply with the Aadhaar Act Regulations, circulars, guidelines etc. issued by UIDAI from time to time," the circular said.
Sebi has also issued consolidated operational guidelines for foreign portfolio investors and designated depository participants to facilitate the implementation of the new FPI regulations.
Under the new norms, all insurance entities and funds from FATF member countries have been classified as category-I FPIs. Among others, unregulated funds or entity where the regulated investment manager is from non-FATF member country would be under category-II.
To ensure the transition of existing FPIs, re-categorisation of registration would be done by NSDL in consultation with the respective designated depository participants (DDPs). An FPI can seek re-categorisation from Category-II to I after providing requisite information and applicable fees to the DDP.
In case, the aggregate investment limit is breached, the FPI concerned has to sell the excess holdings only to domestic investors, as per the guidelines. Once the holding crosses the limit, the depositories have to inform stock exchanges about the breach.
