SEBI plans simpler KYC and Re-KYC rules to end repeated paperwork for investors, mandate 5-year review at KRAs

SEBI plans simpler KYC and Rr-KYC rules to end repeated paperwork for investors, mandate 5-year review at KRAs

• SEBI proposes centralised KYC info to ease account opening for investors
• KRAs to store and share supplementary KYC data across all intermediaries
• Mandatory 5-year KYC review and easier updates for all linked accounts

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Investors may soon be spared the hassle of submitting the same KYC details again and again while opening accounts with different brokers or investment platforms. Market regulator Securities and Exchange Board of India (SEBI) has proposed major changes to the KYC system to make account opening easier for investors and to clean up outdated records maintained by KYC Registration Agencies (KRAs).

In a consultation paper issued on Friday, SEBI has proposed centralising key supplementary KYC information at the KRA level and making it sharable across intermediaries, so that investors are not required to submit the same details again and again when dealing with multiple brokers, mutual fund houses or other market intermediaries.

How it works currently?

Currently, while core client identification data is portable, supplementary information collected as part of client due diligence, such as income range, occupation, place of birth and politically exposed person (PEP) status, is not standardised or centrally stored. As a result, clients are required to provide the same information each time they onboard with a new broker, mutual fund or any other intermediary.

What is going to change?  

Under the proposal, KRAs will store and share commonly used supplementary information like income range, occupation, place and country of birth, FATCA-related details, PEP status and optional net worth data. In the consultation paper SEBI has also proposed standardising income brackets into uniform slabs ranging from Rs 0–5 lakh, Rs 5 – 10 Lakhs, Rs 10 – 50 Lakhs, Rs 50 Lakhs – 1 Crore, Rs 1 – 2 Crores and above Rs 2 Crores to bring consistency in risk profiling.

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Additional information in Account opening forms

Under the proposed rule, intermediaries will be required to collect certain additional details from clients in Part II of the Account Opening Form (AOF), over and above business-specific information. These include the Central KYC (CKYC) number, if available; DigiPIN, a geo-coded digital address introduced by the postal department; the expiry date of officially valid documents (OVDs) such as passport or driving licence; and alternate mobile number and email ID, which will be optional. SEBI said capturing these details at the KRA level will improve accuracy, make KYC records easier to update, and reduce the need for investors to repeatedly submit the same information.

Mandatory 5-year KYC review, One KYC update for all

To address the issue of outdated KYC records, SEBI has proposed that all KYC records maintained by KRAs must be reviewed once every 5 years from the date of account creation or last update. KRAs will be required to send prior intimation to intermediaries if a KYC has not been updated in five years, if the validity of an officially valid document (OVD) has expired, or if a minor client has attained the age of 18. Further, once a client updates KYC details with any one intermediary, the updated information will be shared across all other intermediaries linked to that client through the KRA system. This is expected to ease compliance while ensuring consistency of records.

Alternate contact details, Aadhaar-linked relief

SEBI has also proposed allowing clients to provide alternate mobile numbers and email IDs in addition to primary contact details. If a mobile number available in the KRA system is tagged as seeded with Aadhaar and verified, intermediaries accessing that data will not be required to independently verify the mobile number again.

Account closure and delinking of KYC records

To address the risk of unnecessary dissemination of client information, SEBI has proposed a formal delinking mechanism. Intermediaries will be required to inform the KRA within 3 working days of account closure, and the KRA must update or delink the relevant KYC record within 2 working days.

Easier name changes, relief for OCI residents

The regulator has also proposed relaxing KYC requirements for Overseas Citizen of India (OCI) card holders residing in India. Such clients will not be required to submit overseas address proof if they can provide proof of residence in India for more than 182 days.

Additionally, clients who have already updated their name change in PAN and Aadhaar databases will not be required to submit separate gazette notifications or marriage certificates for KYC updates.

Address verification flexibility

SEBI has also proposed that source verification of a client’s current address will not be a pre-condition for tagging a KYC record as ‘validated’, if the permanent address has already been verified using official databases.

SEBI has sought public comments on the proposals till February 6, 2026, after which SEBI is expected to finalise the framework. SEBI Chairman Tuhin Kanta Pandey has announced at ANMI annual event in Chennai that, regulator is considering such proposal for easier on boarding of investors.

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