e-KYC Authentication facility under section 11A of the Prevention of Money Laundering Act, 2002 by Entities in the securities market for Resident Investors
Summary
This circular establishes the framework for securities market entities to use Aadhaar-based e-KYC authentication under Section 11A of the Prevention of Money Laundering Act, 2002. It outlines the roles and responsibilities of KYC User Agencies (KUAs) and Sub-KUAs in facilitating this process for resident investors. The document details specific operational procedures, data security mandates, and compliance requirements for these entities.
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entities in the securities market, as may be notified by the Central Government, shall be allowed to undertake Aadhaar Authentication under section 11A of the PMLA.
These entities would be registered with UIDAI as KYC user agency (“KUA”) and shall allow all the SEBI registered intermediaries / mutual fund distributors to undertake Aadhaar Authentication of their clients for the purpose of KYC through them.
The SEBI registered intermediaries / mutual fund distributors, who want to undertake Aadhaar authentication services through KUAs, shall enter into an agreement with any one KUA and get themselves registered with UIDAI as sub-KUAs.
Investor visits portal... enters the Aadhaar Number or Virtual Id and provides consent... Adequate controls shall be in place to ensure that Aadhaar Number is not stored anywhere by the Sub-KUA or KUA.
Sharing of e-KYC data by the KUA with Sub-KUA may be allowed under Regulation 16(2) of Aadhaar (Authentication) Regulation, 2016.
SEBI registered entities (Sub-KUAs) will perform e-KYC using registered / Whitelisted devices with KUAs. KUA will ensure that all devices and device operators of Sub-KUA are registered / whitelisted devices with KUA.
For sharing of e-KYC data with Sub-KUA under Regulation 16(2) of Aadhaar (Authentication) Regulations, 2016, KUA shall obtain special permission from UIDAI by submitting an application in this regard.
KUA shall not share UIDAI digitally signed e-KYC data with other KUAs.
KUA/Sub-KUA shall not store Aadhaar number in their database under any circumstances.
The KUA shall maintain auditable logs of all such transactions where e-KYC data has been shared with sub-KUA, for a period specified by the Authority.
It shall be ensured that full Aadhaar number is not stored and displayed anywhere in the system and wherever required only last 4 digits of Aadhaar number may be displayed.
requesting entity shall implement exception-handling mechanisms and backup identity authentication mechanism to ensure seamless provision of authentication services to Aadhaar number holders.
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Source: SecMarx — e-KYC Authentication facility under section 11A of the Prevention of Money Laundering Act, 2002 by Entities in the securities market for Resident Investors. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.