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Jan 27, 2012, 09.47 PM IST | Source: CNBC-TV18

SEBI gunning for uniform KYC norms

Uniform Know Your Customer (KYC) norms for the entire financial sector—that's on top of SEBI's agenda this year.

Uniform Know Your Customer (KYC) norms for the entire financial sector—that's on top of SEBI's agenda this year. Infact, the market regulator has already started talks with other financial sector regulators in efforts to make the whole investment process simpler and more cost-effective, report CNBC-TV18's Sajeet Manghat and Kritika Saxena.

No more filling up of separate KYC forms everytime you open a bank account or want to buy a mutual fund or an insurance policy. That is if SEBI chief UK Sinha has his way.

The uniform KYC process has already kickstarted with the country's first capital market KYC Registration Agency or KRA being set up by CDSL. The agency will maintain the KYC records of an investor centrally and this in turn will reduce back-office cost for intermediaries during transactions

UK Sinha, chairman of SEBI says, “All the existing data, whether it is for somebody registering for MF or somebody registering for DP - all the data of the DPs, all the data of the MF authorities can be transited here, we will decide upon the timings, once we are sure the current system is operating well.”

Now, Sinha has moved onto the next phase which is to expand the scope of uniform KYC from capital markets to the entire financial sector.

Sinha says, “We would like other regulators to also look at our systems. I am happy to tell you that we are already in talks with other regulators. They are evaluating everything. But going forward our dream would be that once you are registered in a KYC with one of the agencies here then for any transaction in the entire financial field you don’t have to go again and again.”

However, qualified foreign investors (QFIs) on their part have raised certain reservations regarding KYC requirements and Tax compliances. The SEBI chief says the matter will be addressed by the Finance Minister.

Sinha says, “This has to be decided also in consultations with the government. There are certain requirements with regards to tax. So, this has to be done in consultations with them.”

Other than sorting out uniform KYC norms, SEBI is also considering the IPO process, with the next few months likely to see detailed reforms in the segment.

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