SEBI releases guidelines to streamline KYC norms

The capital markets regulator SEBI today released guidelines to streamline know-your-customer (KYC) norms through a single-point registration agency. The agency, referred to as KYC Registration Agency (KRA), was long awaited and is expected to bring in much needed transparency and ease with which individuals can participate in the financial markets, reports CNBC-TV18's Neha Arora.

The capital markets regulator looks quite investor friendly. SEBI has mandated that the know-your-client' registration agencies can be fully owned arms of stock exchanges and depositories, but they have to ensure that there is no conflict of interest.
Recently, the SEBI Chairman UK Sinha said that there was a greater need for transparency in capital markets because off-late the exchange has been receiving complaints, and these issues and grievances have been going in favour of the intermediaries rather than investors. So, these guidelines should look more investor friendly.
The contours state that these agencies will have to have net worth of at least Rs 25 crore on a continuous basis and will initially be given a 5-year registration license. The SEBI board can have an independent auditor, which would be looking into the operations of these KRAs.
The intermediaries, which have these accounts of clients, will not be allowed to translate their information to a third party or its associates. They will have to continuously update client information, which means that the client will have to do only a single point registration at one time. The other details will be taken care of by the intermediaries as their transactions go along. Also watch the accompanying video for more details...