1. What is KRA?
KYC Registration Agency (KRA) is an agency registered with SEBI under the Securities and Exchange Board of India [KYC (Know Your Client) Registration Agency] Regulations, 2011. The KRA will maintain KYC records of the investors centrally, on behalf of capital market intermediaries registered with SEBI. Karvy Data Management Services Limited (henceforth known as KDMSL-KRA) is registered with SEBI as KYC (Know Your Client) Registration Agency for carrying out KRA activities under SEBI KYC Registration Agency (KRA) Regulations, 2011
2. What is the need for KRA?
Currently investor has to complete the KYC process as and when they interact with each type of SEBI Intermediaries by submitting the relevant documents, requirements of which may vary from intermediary to intermediary. This has put the investors many hardships. With a view to eliminate such duplication of KYC process to be executed by the investors and to have uniform KYC process across SEBI registered intermediaries, SEBI has introduced the concept of KYC Registration Agency (KRA). This will enable an investor to invest/trade through various intermediaries, after undergoing the KYC process only once through an intermediary. Additionally, any subsequent changes in investor static / demographic information of an investor across various SEBI registered intermediaries can be made by giving a single request to the KRA through one of the registered intermediaries.
3. What are functions and obligations of KRA?
SEBI KRA Regulations 2011 defines the roles and obligations of KRA. Key points are:
4. What is the role of intermediaries in KRA?
KRA shall be responsible for storing, safeguarding and retrieving the KYC documents that are being submitted by various SEBI registered intermediaries.
KRA shall retain the original KYC documents of the client, in both physical and electronic form for the period specified, as well as ensuring that retrieval of KYC information is facilitated within stipulated time period.
Any information updated about a client shall be disseminated by KRA to all intermediaries that avail of the services of the KRA in respect of that client.
KRA(s) shall have electronic connectivity and with other KRA(s) in order to establish inter-operability among KRAs.
KRA shall send a letter to each client after receipt of the KYC documents from the intermediary, confirming the client’s details thereof.
KRA shall take adequate steps for redressal of the grievances of the clients within one month of the date of receipt of the complaint.
SEBI KRA Regulations 2011 defines the roles and obligations of Intermediaries. Key points are:
The intermediary shall perform the initial KYC/due diligence of the client, shall upload the KYC information / documents on the system of the KRA and send the original KYC documents to KRA within the prescribed time.
When the client approaches another intermediary subsequently, it will be optional for the intermediary to verify and download the client’s details from the system of KRA or to take fresh KYC as per existing system.
However, upon receipt of information on change in KYC details and status of the clients by the intermediary or when it comes to the knowledge of the intermediary, at any stage, the intermediary shall be responsible for uploading the updated information on the system of KRA and for sending the physical documents to KRA, wherever necessary.
An intermediary shall not use the KYC data of a client obtained from the KRA for purposes other than it is meant for; nor shall it make any commercial gain by sharing the same with any third party including its affiliates or associates.
5. How does the KRA benefit the investors and the intermediaries?
The intermediary shall have the ultimate responsibility for the KYC of its clients, by undertaking enhanced KYC measures commensurate with the risk profile of its clients.
KRA not only prevents duplication and inconvenience to investors, it also enables a single point change management. Further, intermediaries need not collect KYC documents from KYC compliant clients, thus eliminating the need to collect and store the same. Inspection would be on the basis of scanned images, which would simplify compliance with KYC requirements.
6. Would an intermediary be required to do In-Person Verification (IPV), for a KYC compliant client?
As per SEBI circular MIRSD/Cir-26/2011, dated December 23, 2011, it shall be mandatory for all the intermediaries to carry out In-Person Verification (IPV) of their clients, if not already done. The IPV carried out by one SEBI registered intermediary can be relied upon by another intermediary. Only certain category of personnel can carry out IPV as defined in the above referred circular.
7. How does an intermediary initiate the registration procedure with KDMSL-KRA?
Each Intermediary has to register with KDMSL-KRA and detailed procedure will be communicated to those Intermediaries. They need to fill-up registration form and send the same duly signed with Terms and Conditions along with the requisite documents to the following address:
M/s. Karvy Data Management Services Limited
KYC Registration Agency,
“Karvy House”, No. 46, Avenue 4,
Street No. 1, Road No. 10, Banjara Hills, Hyderabad – 500034
Following supporting documents need to be submitted to KDMSL-KRA along with the Registration Form. Photocopy of the documents should have been certified by the Designated / Whole Time Director(s) / Company Secretary along with seal / stamp of the Intermediary
Certified True Copy of SEBI Registration Certificate with validity period. Certified True Copy of PAN Card.
Name(s) of Designated / Whole Time Director(s) / Company Secretary along with their designation, Director Identification Number (DIN) / PAN and signature(s) on the letterhead of the Intermediary.
Certified True Copy of the latest Balance Sheet.
Necessary due diligence process will be carried out before registering intermediaries like checking with Blacklist master, Suspension of the Intermediaries, etc. Once registration process is completed successfully, User ID will be created for Admin User i.e. Compliance Officer and the password will be intimated through designated email given in the Intermediary Registration Form. Once Admin Users logs in, he/she can create multiple User IDs as per their requirements. Password will be auto-generated and intimated to the user to the registered email ID.
8. How will the data maintained by the KRA be disseminated to the Intermediaries?
KDMSL-KRA will give suitable web-based application interface to the registered intermediaries/ RTAs in case of intermediaries being Mutual Funds, through which they would be able to verify, download or upload information from/ to the KRA.
9. Would there be any change in the KYC procedure for Corporates, FIIs and other Non- individual entities?
KYC procedures for Corporates, FIIs and other non-individual entities are to be complied as specified under SEBI Circular No. MIRSD/SE/CIR-21/2011, dated October 5, 2011 and these are subject to change from time to time based on SEBI circulars or as per any other regulatory requirements.
10. Can any account be opened by the Intermediary if the KYC is under process?
Intermediary has to verify with KRA system whether said PAN already exists or not. If it is already available, it will not be necessary for the Intermediary to seek KYC documents again as intermediary can rely upon the KYC done by another intermediary. However, Intermediary can accept the missing information with the requisite documents and update suitably in KRA system. It is the responsibility of the Intermediary to ensure complete KYC process and availability of the requisite documents.
11. What information will be made available to the intermediary? Will the signature also be made available by the KRA?
All the KYC information, including signatures, which are provided as part of the KYC form will be made available to the registered intermediary.
12. If the documents are valid at the time of acceptance at Intermediary and expires before it reaches the KRA what will be the status of the clients KYC?
Supporting document(s) submitted along with the KYC application form should have minimum 30 days validity (wherever applicable and relevant) at the time of submission to the Intermediary will be considered for KYC.
13. Will the KRA system permit upload of duplicate records i.e. of an existing KYC compliant investor?
In case an intermediary uploads another KYC of an existing KYC compliant investor, the same will be rejected by the KRA system and the intermediary will have to download the KYC details of the client from the KRA.