Incomplete KYC: 1.3crore investor a/cs on hold

KYC registration entities, KRAs in market parlance, said out of nearly 11 crore investors under Sebi’s regulatory purview, about 1.3 crore accounts are ‘on hold’ (meaning these investors can’t transact in stocks, MFs and commodities using these KYCs) since these do not conform to Sebi rules for various reasons. The five KRAs jointly came out with a detailed release as there were cases where investors were not sure if their KYCs, even if done properly, would allow them to continue to invest in stocks, commodities and MFs.

The need to reclassify KYCs under various categories arose after it was found that KYCs of many investors were still not updated with PAN and Aadhar, and the linkages were missing.

Several of these KYCs were done using documents like utility bills (electricity, telephone), bank account statements etc, which are no longer accepted as valid documents for KYC compliance by Sebi.

Effective April 1, under the updated KYC compliance process, KRAs have categorised each investor’s KYC in three categories: validated, registered and on hold. The categorisation was based on availability of PAN, Aadhaar, email and mobile number of the investors, an official from a KRA said.