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CDSL Ventures Ltd (CVL), a wholly owned subsidiary of Central Depository Services (India) Ltd, launched the first central Know Your Client (KYC) Registration Agency for the capital markets on Wednesday. The KYC registration agency will maintain the KYC records of an investor centrally, on behalf of capital market intermediaries registered with SEBI.
The aim of a centralised KYC registration agency is to avoid the duplication of work and make the overall process simple. This may become a trend setter for the industry, said Mr Rajeev Agarwal, Whole Time Member, SEBI.
CVL was earlier mandated by the mutual fund industry to handle the work of “customer profiling and record keeping” for issuance of KYC acknowledgement to mutual fund investors.
“As per the new guidelines, an intermediary shall perform the initial KYC of its clients and upload the details in the KRA system. Thus, when a client approaches another intermediary, it can verify and download the client's KYC details from the KRA system. Further, any subsequent changes in demographic details of an investor across various intermediaries can be updated by simply updating the record maintained with the KRA,” said a media statement.
SEBI wants multiple KYC registration agencies to carry out the process. “We don't have any identified number or ceiling beyond which we will not permit. We will go by the idea of how fit and proper they are. SEBI is obviously very keen to have multiple KYC registration agencies. We don't want single agency. Going by the competition, my feeling is, that there won't be too many registration agencies,” said Mr U.K. Sinha, Chairman, SEBI.
SEBI is also talking to other regulators in the financial sectors to set up a single central KYC registration agency. “The talks to other regulators are in a preliminary stage right now. They have their own requirements. When the SEBI KRA system is stabilised then we can move forward to speaking to the other regulators,” said Mr Sinha.
The SEBI Chairman also stressed on the need to relook the IPO process.
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