With Aadhar Cards coming into the picture, we are all aware about KYC (Know Your Customer) procedures. Similarly, SEBI Registered Investment Advisors are also required to follow the KYC procedure for their clients, at all times, but most of them were not even aware of KYC. In May 2019, all the RIAs received a mail from SEBI regarding registration status of CKYC.
What is CKYC?
CKYC is Central KYC that can be used across financial institutions such as banks, Mutual Funds, NBFCs, Insurance Companies, etc. The CKYC is being managed by the Central Registry of Securitization and Asset Reconstruction and Security Interest in India (CERSAI). Once you get it done, it does not need to be done again. It simply means one identity, one customer, one KYC.
Why is KYC required for your investor clients?
SEBI Intermediaries should “know their clients” before they start providing services to them. KYC is nothing but “Client Due Diligence”. This is done to identify persons who own or control the securities account and if there are any suspicious or fraudulent transactions to be reported to SEBI.
Who needs to get CKYC done?
The following intermediaries regulated by SEBI are required to upload information on the portal of Central KYC Registry:
- All Recognized Stock Exchanges
- Stock Brokers through Recognized Stock Exchanges
- All recognised Depositories
- Depository Participants through Depositories
- Association of Mutual Funds in India
- Mutual funds through AMFI
- Portfolio Managers (PMS)
- KYC Registration Agencies (KRAs)
- Alternative Investment Funds (AIFs)
- Collective Investment Schemes (CIS)
- Investment Advisors
How to register?
Step 1: Every intermediary has to first get registered with CKYC Registry. You can access the Registration Form here.
The documents that are required to be submitted along with the application are mentioned here.
Step 2: On completion of the registration, an email will be sent to you or the person authorized to take care of the compliance, i.e., the Nodal Officer with link to register on testbedportal.
Step 3: An email will be sent to the Nodal Officer with a link to complete the submission on successful registration. On successful submission of the application, a printable form will be generated and reference ID will be created. You can check the current registration status on the CKYC Portal with the reference number.
Step 4: You or the Nodal Officer will get login credentials within 48 hours to test uploading documents on the portal.
Step 5: The admins have to upload the documents of clients to test working of the portal once the login credentials are received. Admins will have to use their DSC to upload the documents.
Step 6: After testing is done and documents are verified by CKYCR, your application will be approved.
Step 7: On approval, physical copies of duly signed form with the supporting documents have to be sent to Central KYC Registry’s Office at Delhi.
Step 8: CKYCR’s administrator will verify the physical documents.On successful verification, user credentials will be emailed to the Admin and Co-Admin users for uploading of clients’ documents.
The intermediary has to file the electronic copy of the client's KYC records with the Central KYC Records Registry within ten days after the commencement of an account-based relationship with a client. Once the KYC information is uploaded successfully and checked by the CKYCR administrator, a 14 digit unique KYC identifier will be generated for every client.
- By saloni parakh