Sebi defers diktat requiring foreign investors to disclose KYC details

The Securities and Exchange Board of India (Sebi) has deferred the diktat requiring foreign investors to disclose their mobile number, email address and income details to depositories by another month.

The move was believed to be aimed at curbing practices such as round tripping and money laundering.

"Based on the representations received from MIIs, Sebi has decided to extend the deadline for making 6-KYC attributes mandatory for new accounts opened by a month to August 1, 2021. For existing clients, the deadline shall be July 31, 2021," NSDL said in a note on Wednesday.

The six KYC attributes include name, address, PAN, mobile number, email address and income range.

Separately, the Asia Securities Industry & Financial Markets Association (Asifma) has written to the regulator asking for exemption from maintenance of call recordings when trading from alternate locations as well as to relax the requirement for intermediaries to upload documents on KRA and Central KYC Registry (CKYCR) portals due to delay in attestation and notarisation of documents amid the pandemic.

"We hope that the firms will be allowed to upload the documents on the KRA portal and on CKYCR once the normalcy resumes as members continue to face logistical challenges in completing onboarding formalities for new and existing clients as the industry is again largely working from home. As was the case recently, we hope intermediaries can be allowed to upload the documents once the relaxation period is over. Similar relaxations are needed for CKYCR uploads," said Asifma in its note.

Last month, the custodians had highlighted the difficulty in sharing the mobile number of investors and income range due to data confidentiality and asset protection concerns. They wanted these attributes to be made non-mandatory for the clients that include foreign portfolio investors (FPIs), foreign venture capital investors and those that come through the foreign direct investment route.

Most foreign investors do not permit sharing of mobile numbers officially and some consider it as a risk factor if an employee quits and his details remain in official records.

All six KYC attributes were earlier made mandatory for new accounts from June 1, 2021. For all existing accounts, custodians had to verify that all six KYC attributes were updated and, wherever required, necessary communication was sent to their clients, to update the same on or before May 31, 2021.