Streamlining of the process for surrender of (Know Your Client) Registration Agency (KRA) registration.
Summary
This circular streamlines the process for Know Your Client Registration Agencies (KRA) to surrender their SEBI registration in voluntary or involuntary scenarios. It mandates that KRAs establish a Board-approved Standard Operating Procedure (SOP) to ensure orderly wind-down and seamless transfer of KYC records to a Transferee KRA. The document outlines specific procedural steps, timelines, and oversight mechanisms for data migration, stakeholder notification, and final compliance reporting.
Text
process for surrender of KRA registration should be streamlined for voluntary/involuntary scenarios so that critical operations and services of KRA are wind down in orderly manner.
registration and modification of KYC records of investors through registered intermediaries and maintaining interoperability amongst KRAs for facilitating portability of such records is a core function of KRAs and shall considered as critical.
KRA surrendering its certificate of registration ... must transfer KYC records available with it to another SEBI-registered KRA ... ensuring complete transfer of client records ... without loss or tampering of data enabling seamless client services of KRAs without requiring fresh KYC.
KRA shall have in place, a Standard Operating Procedure (SOP) to be followed in case any of the scenarios as mentioned at paragraphs no. 1.2 above, getting triggered. The SOP shall be approved by the board of the KRA.
SOP should outline the manner in which the critical operations and services of the Transferor KRA to be transferred to Transferee KRA ensuring continuity and protection of KYC data ... settlement of contractual and statutory obligations and avoidance of disruption in the securities market.
KRA surrendering its certificate of registration shall constitute an Oversight Committee which shall be responsible for monitoring the winding down process including transfer of KYC data, seamless investor services, etc as specified under the SOP.
KRAs shall ensure compliance with the SEBI Act, Regulations, Rules and relevant guidelines issued from time to time. Applicable Acts/Codes such as Rules made under Prevention of Money Laundering Framework, Insolvency and Bankruptcy Code (IBC) shall also be adhered to.
KRA shall make the SOP available on their websites within 90 days from the date of issuance of this circular.
The KRA intending to surrender its certificate of registration shall disclose details pertains to its KRA operations and services such as number of KYC records, infrastructure, employees, contractual agreements/obligation and other relevant information to all other KRAs...
Transferor KRA shall apply to SEBI for surrender of its registration as per extent process along with transition plan for winding down of its critical operations and services, within 7 working days of approving the decision by its Board.
The KRA proposing winding down its critical operations and services, shall require to obtain in-principle approval from SEBI to commence the process of winding down and comply with directions /instructions as may be advised by SEBI.
Transferor KRA shall notify stakeholders (intermediaries including other KRAs, investors, creditors, Industry Associations etc) within seven working days, regarding its decision to wind down duly mentioning a sufficient notice period for inviting objection...
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Source: SecMarx — Streamlining of the process for surrender of (Know Your Client) Registration Agency (KRA) registration.. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.