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The Securities and Exchange Board of India (SEBI) chairperson, Madhabi Puri Buch, said on Tuesday that the KYC Registration Authority (KRA) system is required to keep the financial services sector safe.
Responding to a query on simplifying KYC for mutual fund investors and the possibility of centralised KYC becoming a reality, Buch said a Paytm-type situation cannot be allowed to happen in the Indian stock market.
“We have the KRA system and that is very robust,” she said. “We will not allow a Paytm-type of contamination in our market. In the banking system, there is no KRA-type system, so a problem with Paytm stays with Paytm. It does not contaminate other banks. But if we allow someone like Paytm to come into our system with no KRA and it contaminate the whole system... we cannot allow that,” Puri said at an event organised by NSE in Mumbai.
The SEBI chairperson said that measures to curb F&O trading are a prudent move from a long-term perspective and will not be detrimental to the health of exchanges. “Market infrastructure institutions need to function as a commercial entity, a public utility, as well as a first-level regulator. If your clients repeatedly lose money, then they will never come back,” said Buch.
Buch said that qualified brokers will soon introduce half a dozen additional risk pop-up parameters to guide investors at the point of trade. The MF industry would launch the ₹250 SIP very soon as well. “The scale of the industry will allow players to make money from small sachet-size investments,” she said.
The new website for passive funds (launched by NSE) will help investors. “How can we help investors to benchmark, compare, and make an informed decision, and how can it be made simpler and quicker? There will be other important participants in the market ecosystem who will be soon be announcing similar kinds of benchmarking data sites to make things easier for investors, particularly for the newer asset classes,” said Buch.
NSE’s website for passive funds provides in-depth information on aggregate industry data, fund-wise data, screeners for selecting funds based on various parameters such as the underlying index, AUM, tracking error, tracking difference, trading volume, TER, and comparison of funds.
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