Stock market regulator SEBI notified the KYC (know your client) registration agency (KRA) regulations on Friday.
KRAs are entities that would be responsible for capturing and maintaining KYC records across all SEBI regulated entities.
The regulator had mooted a KRA for implementing single KYC for all capital market entities in its board meeting on July 28, and these regulations are the first step towards harmonisation. Wholly owned subsidiaries of recognised stock exchanges, depositories and self regulated organisations (such as AMFI) or any other SEBI registered intermediary are eligible to become a KRA.
Requirements
It said that KRAs must have a net worth of Rs 25 crore on a continuous basis and qualify the extant fit and proper criteria.
They should also have organisational capabilities, technology, systems and safeguards for maintaining data privacy and preventing unauthorised data sharing.
Conflict of interest
In addition there should not be conflict of interest between an entity's role as a KRA and its other commercial activities, said SEBI.
SEBI plans to register KRAs initially for a period of five years. KRAs are expected to apply for permanent registration three months before the expiry of initial registration.
On being satisfied that an applicant is eligible, SEBI would grant a certificate of permanent registration as KRA.
KRAs are required to follow a code of conduct specified by SEBI and are liable to be acted upon by SEBI in case of failure to comply with regulations, to cooperate in audit and investigation, to furnish information and to pay fees.
KRAs are expected to pay Rs 50,000 as application fees, Rs 1 lakh each as initial and permanent registration fees and Rs 1 lakh as annual fees.