Master Circular on Know Your Client (KYC) norms for the securities market
Summary
This part of the document introduces the Master Circular on KYC norms, consolidating previous SEBI circulars up to September 30, 2023. It establishes that the provisions come into force immediately upon issuance and sets a deadline of December 31, 2023 for updating existing records. The section also defines key terms such as Aadhaar number, Beneficial owner, and Client Due Diligence by referencing other statutory acts. This section defines key terms such as Digital KYC, Intermediary, and PMLA, establishing the regulatory framework for compliance. It mandates that SEBI registered intermediaries perform KYC using uniform formats and verify client identities through Proof of Identity documents. The text further specifies requirements for Permanent Account Number verification and lists exemptions from mandatory PAN submission. This section mandates the prohibition of storing Aadhaar numbers and specifies acceptable documents for Proof of Address (PoA). It outlines requirements for non-residents, third-party correspondence addresses, and the identification of beneficial ownership. Additionally, it lists specific additional documentation required for various types of non-individual legal
Text
The Securities and Exchange Board of India (SEBI) has been issuing various circulars/directions from time to time on Know Your Client (KYC) norms to be followed by intermediaries in the securities market. In order to enable the users to have access to all the applicable circulars/directions at one place, this Master Circular on the captioned subject is being issued.
This Master Circular is a compilation of the circulars/directions issued by SEBI up to September 30, 2023 on the captioned subject and includes certain modifications to align such circulars/directions with the provisions of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 and the Securities and Exchange Board of India [KYC (Know Your Client) Registration Agency] Regulations, 2011. The provisions of this Master Circular shall come into force from the date of its issue.
Any modifications/updation in existing KYC records, shall be effected in line with the provisions of this Circular by December 31, 2023.
On and from the date of issue of this Circular, all circulars for the purpose of KYC as listed in Appendix shall stand rescinded/modified as indicated therein.
Notwithstanding such rescission, a) Anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; b) Any application made to the Board under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular; c) The previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as if the rescinded circulars had never been rescinded.
This Master Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market.
“Aadhaar number” shall have the same meaning as assigned to it under sub-section (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 and includes any alternative virtual identity generated under sub-section (4) of section 3 of that Act.
“Act”, “Regulations”, “Circulars” and “Guidelines” mean the Securities and Exchange Board of India Act, 1992 and the Regulations, Circulars and Guidelines made thereunder and amendments thereto.
“Authentication”, in the context of Aadhaar authentication, shall have the same meaning as defined under sub-section (c) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016.
“Beneficial owner” shall have the same meaning as assigned to it under sub section 1 clause (fa) of section 2 of the Prevention of Money Laundering Act, 2002.
“Central KYC Records Registry” (CKYCR) shall have the same meaning as assigned to it under Rule 2 (1) (ac) of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005.
"Client" shall have the same meaning as assigned to it under Section 2(ha) of the Prevention of Money Laundering Act, 2002.
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Source: SecMarx — Master Circular on Know Your Client (KYC) norms for the securities market. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.