Business Standard

CDSL Ventures starts first KRA agency

BS Reporter  |  Mumbai 

Ltd (CVL), a fully-owned subsidiary of the Bombay Stock Exchange (BSE)-promoted Central Depository Services, on Wednesday become the first (KRA) in the country. The market regulator has made the KRA system mandatory for all client accounts opened from January 1.

A KRA is a Sebi-registered agency that centrally maintains KYC (know-your-client) records of investors on behalf of stock brokers and other intermediaries.

Investors opening new accounts with brokers will have to complete the KYC formalities only once, which will get uploaded to a KRA. In future if the investor changes the broker, the latter can retrieve the information from a KRA, unlike on Wednesday, where an investor needs to undergo the entire KYC process once again. It will also benefit intermediaries or brokers, as it will save the back office and employee cost of maintaining KYC documents in physical form.
 

KRA STEP-BY-STEP
  • Investor opening a new account goes to a broker
  • Broker completes the KYC formalities and sends the documents to a KRA
  • KRA scans, digitalises and stores the documents 
  • Investor becomes KYC-compliant 
  • If an investor wishes to change his broker, the new broker pays Rs 35 to a KRA and gets access to the KYC information of client

“Intermediaries will benefit, as the KYC documents would be stored centrally with the KRA, which would bring down the storage cost, as these documents need to be preserved for 10 years,” said Cyrus Khambata, managing director, CVL.

Already, about 300 intermediaries have empanelled with CVL, which will perform the initial KYC of its clients and upload the details in the KRA system.

Khambata said CVL would charge Rs 35 to intermediaries for a single KYC request. Meanwhile, KYC registration will be free for investors. There will not be any monetary incentive to intermediaries for uploading a KYC information with a KRA.

“Once the KRA system stablises for Sebi, we will ask more financial sector regulators to implement the same. has already initiated preliminary talks with the regulators but everybody has their own requirements,” said Sebi chairman at the inauguration of CVL’s KRA initiative.

Sinha said the KRA initiative was aimed at easing investor experience. “Earlier, the KYC process was a major irritant for investors.”

Sinha said Sebi was keen to have multiple KRAs. “There is no ceiling beyond which we won’t permit KRAs. But going by the competition, there won't be too many KRAs,” he said.

NSDL, promoted by the National Stock Exchange, is also in the process of setting up a KRA.

Experts believe the KRA business might get a push once it is made mandatory for existing clients as well. At present existing clients can continue to transact with intermediaries through an already undergone KYC process.

RECOMMENDED FOR YOU

CDSL Ventures starts first KRA agency

CDSL Ventures Ltd (CVL), a fully-owned subsidiary of the Bombay Stock Exchange (BSE)-promoted Central Depository Services, on Wednesday become the first KYC Registration Agency (KRA) in the country.

Ltd (CVL), a fully-owned subsidiary of the Bombay Stock Exchange (BSE)-promoted Central Depository Services, on Wednesday become the first (KRA) in the country. The market regulator has made the KRA system mandatory for all client accounts opened from January 1.

A KRA is a Sebi-registered agency that centrally maintains KYC (know-your-client) records of investors on behalf of stock brokers and other intermediaries.

Investors opening new accounts with brokers will have to complete the KYC formalities only once, which will get uploaded to a KRA. In future if the investor changes the broker, the latter can retrieve the information from a KRA, unlike on Wednesday, where an investor needs to undergo the entire KYC process once again. It will also benefit intermediaries or brokers, as it will save the back office and employee cost of maintaining KYC documents in physical form.
 

KRA STEP-BY-STEP
  • Investor opening a new account goes to a broker
  • Broker completes the KYC formalities and sends the documents to a KRA
  • KRA scans, digitalises and stores the documents 
  • Investor becomes KYC-compliant 
  • If an investor wishes to change his broker, the new broker pays Rs 35 to a KRA and gets access to the KYC information of client

“Intermediaries will benefit, as the KYC documents would be stored centrally with the KRA, which would bring down the storage cost, as these documents need to be preserved for 10 years,” said Cyrus Khambata, managing director, CVL.

Already, about 300 intermediaries have empanelled with CVL, which will perform the initial KYC of its clients and upload the details in the KRA system.

Khambata said CVL would charge Rs 35 to intermediaries for a single KYC request. Meanwhile, KYC registration will be free for investors. There will not be any monetary incentive to intermediaries for uploading a KYC information with a KRA.

“Once the KRA system stablises for Sebi, we will ask more financial sector regulators to implement the same. has already initiated preliminary talks with the regulators but everybody has their own requirements,” said Sebi chairman at the inauguration of CVL’s KRA initiative.

Sinha said the KRA initiative was aimed at easing investor experience. “Earlier, the KYC process was a major irritant for investors.”

Sinha said Sebi was keen to have multiple KRAs. “There is no ceiling beyond which we won’t permit KRAs. But going by the competition, there won't be too many KRAs,” he said.

NSDL, promoted by the National Stock Exchange, is also in the process of setting up a KRA.

Experts believe the KRA business might get a push once it is made mandatory for existing clients as well. At present existing clients can continue to transact with intermediaries through an already undergone KYC process.

image

LIVE MARKET

BSE

  ( %)

NSE

  ( %)

Widgets Magazine

More News

STOCK WATCH

Company Price() Chg(%)
V-Guard Inds. 1117.00 12.93
Indbull.RealEst. 72.20 6.73
Raymond 487.50 5.92
Avanti Feeds 470.00 5.56
Elgi Equipment 166.05 5.03
> More on BSE Gainers
Company Price() Chg(%)
V-Guard Inds. 1117.00 12.17
Indbull.RealEst. 72.15 6.65
BGR Energy Sys. 118.75 6.31
Raymond 487.30 5.81
Elgi Equipment 166.75 5.47
> More on NSE Gainers
Company Price() Chg(%)
Hexaware Tech. 213.40 -6.51
Castex Tech 7.67 -4.96
Natl. Aluminium 41.65 -4.58
Future Retail 143.25 -3.86
Amtek Auto 34.20 -3.80
> More on BSE Gainers
Company Price() Chg(%)
Hexaware Tech. 213.70 -6.07
ABG Shipyard 40.65 -4.80
Natl. Aluminium 41.60 -4.48
Castex Tech 7.55 -4.43
Adani Ports 200.00 -3.96
> More on NSE Gainers
Widgets Magazine
Widgets Magazine
Widgets Magazine

Derivatives

Index
Instrument Type
Expiry Date
Option Type
Strike Price

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard