Q.30: We are registered with CKYC (CERSAI, Delhi), NDML KRA (NSDL), and CAMS KRA for doing/modifying KYCs of clients.

All 3 of them offer almost the same functionalities in a different way. All data may be going into the same database.

We are confused which platform to use when.

Please help us know what functions/processes under each KRA are mandatory from the compliance point of view.

Response:

CKYC & KRA-KYC – both are mandatory. 

CKYC is the master of all! and also the latest reform in the securities market!

As per Regulation 15(8) an investment advisor shall follow KYC procedure as specified by SEBI from time to time.

1. CKYC is mandatory because of SEBI Circulars dt. July 21, 2016 and November 10, 2016.

Note: CKYC ID (14 digits) is to be ensured for every investor coming into the market.

1. KRA-KYC is mandatory because of SEBI KYC Registration Agency Regulations, 2011, where Regulation 16 states the function of ‘Intermediary’ to perform KYC on the system of KRA.

Note: (i) ‘Intermediary’ as per Regulation 2(f) means an entity associated with securities market and registered under sub-section (1A), (1B) and (1) of Section 12 of the SEBI Act, 1992; who is required to do KYC of its clients.

(ii) Under SEBI Act, 1992 ‘Investment Advisor’ is registered under Sub-section (1) of Section 12.

Recommended process:

Check in any KRA – whether KYC status is ‘Registered’.

If KYC is ‘Registered’ then proceed to check if CKYC 14 digit ID is there for him.

If ‘Not registered’ then better get him registered in the CKYC itself directly, because that is the master of all! (Even KRA has to upload KYC records in CKYC)

Check whether CKYC 14 digit is there.

If yes, then fine!

If no, then get him registered in CKYC.

1. KRA-Ok, CKYC-Ok : No problem
2. KRA-Ok, CKYC-Not Ok : CKYC to be done
3. KRA-Not Ok, CKYC-Ok : KRA to be done
4. KRA-Not Ok, CKYC-Not Ok : CKYC to be done – automatically KRA will also be fine!

If ‘Not Done’ then

Step-3: if CKYC 14 digit ID is not there, then do CKYC process.

1. Check in KRA –
   1. KYC Status “Done” in any of the KRAs
      1. Check in CKYC
   2. KYC Status “Not Done” in any of the KRAs