## Report on the Securities and Exchange Board of India (SEBI) KYC Know Your Client Registration Agency Amendment Regulations, 2022
**1. Executive Summary:**
This report analyzes the Securities and Exchange Board of India (SEBI) KYC Know Your Client Registration Agency Amendment Regulations, 2022. This amendment modifies the existing KYC Know Your Client Registration Agency Regulations, 2011. Key changes include defining "change in control" for KRAs, revising references to company law, mandating prior approval from SEBI for KRA control changes, specifying independent validation of KYC records, integrating intermediary systems with KRAs for seamless KYC document flow, and requiring audit trails for KYC record modifications. These amendments aim to enhance the regulatory framework and operational efficiency of KYC processes within the securities market.
**2. Introduction:**
This report provides an informative overview of the Securities and Exchange Board of India (SEBI) KYC Know Your Client Registration Agency Amendment Regulations, 2022, based solely on the provided policy text. The purpose is to inform affected industry stakeholders about the specific changes introduced by this amendment.
**3. Policy Overview:**
* **Original Policy Being Amended:** The Securities and Exchange Board of India KYC Know Your Client Registration Agency Regulations, 2011.
* **Core Objective(s):** As inferred from the text and the title, the objective of the original and amended regulations is to regulate and govern the operations of Know Your Client (KYC) Registration Agencies (KRAs) within the securities market. The regulations aim to streamline and standardize the KYC process for investors and intermediaries.
**4. Background and Rationale:**
The amendment appears designed to address several key areas within the existing regulatory framework:
* **Lack of Clarity on "Change in Control":** The introduction of a specific definition for "change in control" suggests that the original regulations lacked a clear definition, potentially leading to ambiguity in its application to KRAs.
* **Alignment with Updated Legislation:** The revision of references from the Companies Act, 1956 to the Companies Act, 2013 reflects a need to keep the regulations aligned with current legal statutes.
* **Enhanced KYC Validation and Security:** The addition of independent validation of KYC records and the requirement for audit trails indicate an effort to strengthen the accuracy and security of KYC data.
* **Operational Efficiency:** Mandating system integration between intermediaries and KRAs suggests a move towards improving the efficiency of KYC document exchange.
**5. Key Provisions / Changes:**
The Securities and Exchange Board of India KYC Know Your Client Registration Agency Amendment Regulations, 2022, introduce the following key changes to the 2011 regulations:
* **Regulation 2 (Definitions):**
* A new clause (da) is inserted to define "change in control" for KRAs, specifying criteria for listed and unlisted entities. For listed entities, the definition is tied to regulations framed under clause (h) of subsection 2 of section 11 of the Act. For other entities, it defines controlling interest as holding at least 51% of voting rights or the right to appoint a majority of directors or control management.
* Clause (h) is amended to replace "Companies Act, 1956" with "Companies Act, 2013 (18 of 2013)".
* Clause (i) is amended to replace "prescribed" with "specified."
* Clause (k) and (l) are omitted.
* Subregulation 2 is substituted to say all other words and expressions used but not defined in these regulations shall have the same meaning as have been assigned to them under the Act or the Securities Contracts Regulation Act, 1956 (42 of 1956), or the Depositories Act, 1996 (22 of 1996), or the Companies Act, 2013 (18 of 2013), or Prevention of Money Laundering Act, 2002 (15 of 2003) or any rules or regulations made thereunder or any statutory modification or reenactment thereto, as the case may be.
* **Regulation 7 (Change in Control):**
* A new subregulation (5) is added, requiring KRAs to obtain prior approval from SEBI before undergoing a change in control.
* **Regulation 14 (Omission):**
* The phrase "; as prescribed by the Board and" is omitted.
* **Regulation 15 (KRA Responsibilities):**
* A new clause (da) is inserted, mandating KRAs to carry out independent validation of KYC records uploaded by intermediaries as specified by the Board.
* In clause (e), the word "Rules" is replaced with "rules made under the Prevention of Money Laundering Act, 2002 (15 of 2003)."
* In clause (k), the phrase "as prescribed by the Board" is replaced with "as specified by the Board from time to time."
* A new clause (p) is inserted, requiring KRAs to maintain an audit trail of any upload, modification, or download regarding KYC records for each client.
* **Regulation 16 (Intermediary Responsibilities):**
* A new clause (e) is inserted, requiring intermediaries to integrate their systems with the KRA to facilitate seamless movement of KYC documents.
* **Regulation 18 (Inspection):**
* In subregulation 2, in clause (a), the words "as prescribed by the Board" are replaced with "as specified by the Board from time to time."
* **Schedule I (Form A):**
* In Part I, in clause 1.10, after the words "practicing chartered accountant," the words and symbols "having a valid certificate of practice under sub section 1 of section 6 of the Chartered Accountants Act, 1949 (38 of 1949)" shall be inserted.
**Effect of Changes:** These amendments clarify definitions, strengthen data security, and improve the efficiency of KYC processes by mandating technological integration. The prior approval requirement for change in control gives SEBI greater oversight.
**6. Target Audience and Stakeholders:**
Based on the text, the primary target audience and stakeholders are:
* **KYC Registration Agencies (KRAs):** The regulations directly impact their operational procedures, compliance requirements, and governance structure.
* **Intermediaries:** They are required to integrate their systems with KRAs and adhere to the updated KYC validation processes.
* **Securities and Exchange Board of India (SEBI):** The amendment strengthens SEBI's regulatory oversight of KRAs.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency/Bodies:** The Securities and Exchange Board of India (SEBI) is the primary responsible body for implementing and enforcing these regulations.
* **Timelines/Procedures:** The amendment comes into force on the date of its publication in the Official Gazette (January 28, 2022).
* **Change in Control Approval:** KRAs seeking a change in control must now proactively seek SEBI's approval *before* the change occurs.
* **Independent Validation and Audit Trails:** KRAs need to implement systems and processes for independent validation of KYC records and maintaining comprehensive audit trails.
* **Intermediary System Integration:** Intermediaries must invest in integrating their systems with KRA systems to allow for automated KYC document transfer.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcomes of these changes are:
* **Enhanced Regulatory Clarity:** The definition of "change in control" provides greater clarity and reduces ambiguity for KRAs.
* **Improved Data Integrity and Security:** Independent validation of KYC records and audit trails will enhance data accuracy and security, reducing the risk of fraudulent activities.
* **Increased Efficiency:** The mandatory system integration between intermediaries and KRAs is expected to streamline KYC processes and reduce processing times.
* **Strengthened Oversight:** Requiring prior SEBI approval for KRA control changes will allow for greater regulatory oversight and ensure stability within the KYC ecosystem.
**9. Conclusion:**
The Securities and Exchange Board of India (SEBI) KYC Know Your Client Registration Agency Amendment Regulations, 2022, represent a significant step towards strengthening the regulatory framework for KRAs. By clarifying key definitions, enhancing data security measures, and promoting operational efficiency, these amendments are expected to contribute to a more robust and transparent KYC process within the securities market. The amendments demonstrate SEBI's commitment to adapting regulations to address emerging challenges and improve the overall integrity of the market.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body responsible for securities market regulation in India.
Securities and Exchange Board of India Act, 1992: The act that establishes the powers and functions of the Securities and Exchange Board of India.
Securities and Exchange Board of India KYC Know Your Client Registration Agency Regulations, 2011: Regulations pertaining to KYC registration agencies, amended by the current notification.
Securities and Exchange Board of India KYC Know Your Client Registration Agency Amendment Regulations, 2022: The regulation being introduced in the document, amending the 2011 regulations.
KRA: Know Your Client Registration Agency, an entity regulated by SEBI.
Official Gazette: The official government publication where regulations are published.
Companies Act, 1956: An act related to companies.
Companies Act, 2013: An act related to companies, replacing the 1956 act.
Securities Contracts Regulation Act, 1956: An act related to securities contracts.
Depositories Act, 1996: An act related to depositories.
Prevention of Money Laundering Act, 2002: An act related to prevention of money laundering.
Mumbai: City in Maharashtra, India; location of the SEBI notification.
Chartered Accountants Act, 1949: An act related to chartered accountants.
AJAY TYAGI: Chairman of SEBI
Regulatory Sandbox Amendment Regulations, 2020: Amendment regulations by SEBI.
Regulatory Sandbox Amendment Regulations, 2021: Amendment regulations by SEBI.
Payment of Fees and Mode of Payment Amendment Regulations, 2017: Amendment regulations by SEBI.
Securities and Exchange Board of India Change in Conditions of Registration of Certain Intermediaries Amendment Regulations, 2016: Amendment regulations by SEBI.
New Delhi: Capital of India.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-एम.एच.-अ.-29012022-232984
xxxGIDHxxx
CG-MH-E-29012022-232984
xxxGIDExxx
असाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 61] िई ददल्ली, ि क्रिार, िििरी 28, 2022/माघ 8, 1943
No. 61] NEW DELHI, FRIDAY, JANUARY 28, 2022/MAGHA 8, 1943
भारतीय प्रजतभजू त और जिजिमय बोडड
अजधसचू िा
म ंबई, 28 िििरी, 2022
भारतीय प्रजतभजू त और जिजिमय बोडड
[अपि ेग्राहक को िाजिय े(केिाईसी) सबं धं ी रजिस्ट्रीकरण एिसें ी] (सिं ोधि) जिजियम, 2022
स.ं सेबी/एलएडी-एिआरओ/िीएि/2022/72.—भारतीय प्रजतभूजत और जिजिमय बोड,ड भारतीय प्रजतभूजत और
जिजिमय बोडड अजधजियम, 1992 (1992 का 15) की धारा 30 के तहत प्रदाि की गई िजियों का प्रयोग करते हुए
एतद्द्वारा भारतीय प्रजतभूजत और जिजिमय बोडड [अपिे ग्राहक को िाजिये (केिाईसी) संबंधी रजिस्ट्रीकरण एिेंसी] जिजियम,
2011 का और संिोधि करिे के जलए जिम्नजलजखत जिजियम बिाता है, अर्ाडत:् -
1. इि जिजियमों को भारतीय प्रजतभूजत और जिजिमय बोडड [अपिे ग्राहक को िाजिये (केिाईसी) संबंधी रजिस्ट्रीकरण
एिेंसी] (संिोधि) जिजियम, 2022 कहा िा सकेगा ।
2. ये जिजियम रािपत्र म ेंइिके प्रकािि की तारीख को लागू होंग े।
559 GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
3. भारतीय प्रजतभूजत और जिजिमय बोडड [अपिे ग्राहक को िाजिये (केिाईसी) संबंधी रजिस्ट्रीकरण एिेंसी] जिजियम,
2011 म,ें -
I. जिजियम 2 म,ें -
(i) उप-जिजियम (1) म,ें खंड (घ) के बाद जिम्नजलजखत िया खंड िोडा िाएगा, अर्ाडत,् -
“(घक) केिाईसी रजिस्ट्रीकरण एिेंसी (केआरए) के संबंध म ें “जियंत्रण म ेंपररितडि” का अर्:ड -
(i) यदद उसके िेयर दकसी मान्यताप्राप्त स्ट्टॉक एक्सचेंि में सूचीबद्ध (जलजस्ट्टड) हों, तो
िही होगा िैसा अजधजियम की धारा 11 की उप-धारा (2) के खंड (ि) के तहत बिाए
गए जिजियमों में बताया गया ह;ै
(ii) दकसी अन्य मामल े म,ें जियंत्रक जहत (कंरोललगं इंटरेस्ट्ट) में पररितडि होगा;
स्ट्पष्टीकरण.- उप-खंड (ii) के प्रयोििार्ड, िब्दों “जियंत्रक जहत” का अर्ड ह,ै
(क) कोई जहत (इंटरेस्ट्ट), चाह े दिर िह प्रत्यक्ष हो या अप्रत्यक्ष, िो मताजधकारों के कम स े
कम इक्यािि प्रजतित तक का हो; या
(ख) अजधकांि जिदिे कों को जियि करि े का अजधकार अर्िा प्रत्यक्ष रूप स े या अप्रत्यक्ष
रूप से प्रबंध-मंडल (मिै ेिमेंट) पर जियंत्रण रखिे का अजधकार;”
(ii) उप-जिजियम (1) म,ें खंड (ि) के स्ट्र्ाि पर जिम्नजलजखत खंड आ िाएगा, अर्ाडत,् -
“(ि) “केिाईसी रजिस्ट्रीकरण एिेंसी (केआरए)” एक ऐसी कंपिी ह ै िो कंपिी अजधजियम,
2013 (2013 का 18) के तहत बिी और रजिस्ट्टर हुई हो, और जिसे इि जिजियमों के तहत
रजिस्ट्रीकरण प्रमाणपत्र प्रदाि दकया गया हो जिसे अब से अजधजियम के प्रािधािों के अि सार
एक मध्यिती (इंटरमीजडयरी) समझा िाएगा;”
(iii) उप-जिजियम (1) म,ें खंड (झ) के स्ट्र्ाि पर जिम्नजलजखत खंड आ िाएगा, अर्ाडत,् -
“(झ) “केिाईसी” का अर्ड ह ै – पते के सबूत, पहचाि के सबूत का जिधाडरण करिे तर्ा उिका
सत्यापि करिे के जलए और धि-िोधि जििारण (काले धि को िैध बिाए िािे से रोकिे) के
संबंध म ें बोड ड या दकसी अन्य प्राजधकरण (अर्ॉररटी) द्वारा समय-समय पर िारी दकए गए
जियमों, जिजियमों, ददिाजिदेिों तर्ा पररपत्रों (सक डलसड) का पालि करिे के जलए बोडड द्वारा
जिधाडररत की गई प्रदक्रया;”
(iv) उप-जिजियम (1) म,ें खंड (ट) एिं खंड (ठ) हट िाएगं े ।
(v) उप-जिजियम (2) के स्ट्र्ाि पर जिम्नजलजखत उप-जिजियम आ िाएगा, अर्ाडत,् -
“(2) इि जिजियमों में उपयोग दकए गए ककंत अपररभाजित अन्य सभी िब्दों आदद के िही अर् ड
होंगे, िो, यर्ाजस्ट्र्जत, अजधजियम या प्रजतभूजत संजिदा (जिजियमि) अजधजियम, 1956
[जसक्यूररटीज़ कॉण्रैक््स (रेग्यूलेिि) एक्ट, 1956] (1956 का 42), या जिक्षेपागार
अजधजियम, 1996 [जडपॉजज़टरीज़ एक्ट, 1996] (1996 का 22), या कंपिी अजधजियम,
2013 (2013 का 18), या धि-िोधि जििारण अजधजियम, 2002 [जप्रिेन्िि ऑि मिी
लांडररंग एक्ट, 2002] (2003 का 15) अर्िा उिके तहत बिाए गए जियमों या जिजियमों[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3
(रेग्यलू ेिन्स) अर्िा उिके दकसी कािूिी संिोधि या उिकी प ि:अजधजियजमजत म ें उिके जलए
ददए हुए ह ैं।”
II. जिजियम 7 म,ें उप-जिजियम (4) के बाद, जिम्नजलजखत िया उप-जिजियम िोडा िाएगा, अर्ातड ्,-
“(5) िहा ाँ केआरए जियंत्रण म ें पररितडि का प्रस्ट्ताि करता हो, िहााँ िह पररितडि के बाद उसी रूप म ें
कायड िारी रखि े के जलए बोड डकी पूिड मंिूरी लगे ा ।”
III. जिजियम 14 के स्ट्र्ाि पर जिम्नजलजखत जिजियम आ िाएगा, अर्ाडत,् -
“केिाईसी के प्रयोििार् डकेआरए द्वारा जलए िाि ेिाल ेदस्ट्ताििे
14. केआरए मध्यिती (इंटरमीजडयरी) स े ग्राहक के केिाईसी संबंधी दस्ट्तािेि, धि-िोधि जििारण
(काल े धि को िधै बिािे स े रोकिे) के संबंध म ें बोडड या दकसी अन्य प्राजधकरण (अर्ॉररटी) द्वारा समय-
समय पर िारी दकए गए जियमों, जिजियमों (रेग्यलू ेिन्स), ददिाजिदेिों और पररपत्रों (सक डलसड) के
अि सार, लेगा।”
IV. जिजियम 15 म,ें
(i) खंड (घ) के बाद जिम्नजलजखत िया खंड िोडा िाएगा, अर्ाडत,् -
“(घक) केआरए मध्यिती (इंटरमीजडयरी) द्वारा उसके जसस्ट्टम पर अपलोड दकए गए केिाईसी संबंधी ररकॉड ड
की मान्यता स्ट्ितंत्र रूप से उसी प्रकार िााँचेगा, िैसा बोडड द्वारा समय-समय पर बताया िाए ।”
(ii) खंड (ङ) के स्ट्र्ाि पर जिम्नजलजखत खंड आ िाएगा, अर्ाडत,् -
“(ङ) केआरए ग्राहक के केिाईसी संबंधी दस्ट्तािेि, इलेक्रॉजिक रूप म ें धि-िोधि जििारण अजधजियम,
2002 (2003 का 15) [जप्रिेन्िि ऑि मिी लांडररंग एक्ट, 2002] के तहत बिाए गए जियमों के अि सार
बताई गई अिजध तक, रखेगा और सार् ही यह भी स जिजित करेगा दक केिाईसी संबंधी िािकारी जिधाडररत
समयािजध के भीतर ही पि : प्राप्त हो िाए ।”
(iii) खंड (ट) के स्ट्र्ाि पर जिम्नजलजखत खंड आ िाएगा, अर्ाडत,् -
“(ट) केआरए अपिे डाटाबेस तक अिजधकृत पहुचाँ को रोकिे के जलए सभी िरूरी कदम उठाएगा और अपिे
जसस्ट्टम तर्ा प्रदकयाओं का जियजमत रूप से ऑजडट करिाएगा, िैसा बोडड द्वारा समय-समय पर बताया
िाए।”
(iv) खंड (ण) के बाद जिम्नजलजखत िया खंड िोडा िाएगा, अर्ाडत,्-
“(त) प्रत्येक ग्राहक के केिाईसी संबंधी ररकॉड ड के संबंध म ें यदद क छ अपलोड दकया िाता ह ै / बदलाि दकया
िाता ह ै/ डाउिलोड दकया िाता ह,ै तो केआरए उसका पूरा जपछला ररकॉड ड(ऑजडट रेल) रखेगा ।”
V. जिजियम 16 म,ें खंड (घ) के बाद जिम्नजलजखत िया खंड िोडा िाएगा, अर्ाडत,् -
“(ङ) मध्यिती (इंटरमीजडयरी) केआरए के जसस्ट्टम के सार् अपिे जसस्ट्टम को िोडकर रखगे ा, तादक
केिाईसी संबंधी दस्ट्तािेिों का केआरए और मध्यिती के बीच जबिा दकसी रुकािट के आदाि-प्रदाि हो
सके ।”4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
VI. जिजियम 18 म,ें उप-जिजियम (2) म,ें खंड (क) के स्ट्र्ाि पर जिम्नजलजखत खडं आ िाएगा, अर्ाडत्,-
“(क) यह स जिजित करि े के जलए दक लेखा बजहयााँ, ररकॉड ड और केिाईसी संबंधी दस्ट्तािेि, िो भी बोड ड
द्वारा समय-समय पर बताए िाएाँ, केआरए द्वारा रखे िा रह ेह;ैं
VII. अि सूची I म,ें प्ररूप क म,ें भाग I म,ें खंड 1.10 के स्ट्र्ाि पर जिम्नजलजखत खडं आ िाएगा, अर्ाडत्,-
“1.10 आिेदक की जपछले तीि जित्तीय ििों की ि द्ध-माजलयत (िेटिर्ड) [त लि-पत्र (बैलेंस िीट) की
प्रजत और अंजतम ि द्ध-माजलयत (िेटिर्)ड की प्रजत संलग्न करें, जिन्ह ें ऐसे पेिेिर चाटडड ड अकाउंटेंट द्वारा
प्रमाजणत दकया गया हो जिसके पास चाटडडड अकाउंटेंट अजधजियम, 1949 (1949 का 38) की धारा 6 की
उप-धारा (1) के अि सार मान्य व्यिसाय-प्रमाणपत्र (सर्टडदिकेट ऑि प्रैजक्टस) हो]
अिय त्यागी, अध्यक्ष
[जिज्ञापि-III/4/असा./619/2021-22]
पाद रटप्पण:
1. भारतीय प्रजतभूजत और जिजिमय बोडड [अपिे ग्राहक को िाजिये (केिाईसी) संबंधी रजिस्ट्रीकरण एिेंसी] जिजियम,
2011, स.ं एल.ए.डी.-एि.आर.ओ./िी.एि./2011-12/29/36772, 2 ददसम्बर, 2011 को भारत के रािपत्र म ें
प्रकाजित हुए र्े ।
2. भारतीय प्रजतभूजत और जिजिमय बोडड [अपिे ग्राहक को िाजिये (केिाईसी) संबंधी रजिस्ट्रीकरण एिेंसी] जिजियम,
2011 तत्पिात् –
(क) 22 माचड, 2013 को भारतीय प्रजतभूजत और जिजिमय बोड ड [अपि े ग्राहक को िाजिये (केिाईसी) संबंधी
रजिस्ट्रीकरण एिेंसी] (संिोधि) जिजियम, 2013, सं. एल.ए.डी./एि.आर.ओ./िी.एि./2012-13/35/6998,
द्वारा
(ख) 13 माच,ड 2014 को भारतीय प्रजतभूजत और जिजिमय बोडड [अपिे ग्राहक को िाजिये (केिाईसी) संबंधी
रजिस्ट्रीकरण एिेंसी] (संिोधि) जिजियम, 2014, सं. एल.ए.डी.-एि.आर.ओ./िी.एि./2013-14/46/522,
द्वारा
(ग) 11 अगस्ट्त, 2014 को भारतीय प्रजतभूजत और जिजिमय बोडड [अपि े ग्राहक को िाजिये (केिाईसी) संबंधी
रजिस्ट्रीकरण एिेंसी] (दसू रा संिोधि) जिजियम, 2014, स.ं एल.ए.डी.-एि.आर.ओ./िी.एि./2014-
15/05/23483, द्वारा
(घ) 8 ददसम्बर 2016 को भारतीय प्रजतभूजत और जिजिमय बोडड [क छ मध्यिर्तडयों (इंटरमीजडयरीज़) के
रजिस्ट्रीकरण की ितों में पररितडि] (संिोधि) जिजियम 2016, अजधसूचिा सं. सेबी/एल.ए.डी.-
एि.आर.ओ./िी.एि./2016-17/023, द्वारा
(ड) 6 माच,ड 2017 को भारतीय प्रजतभूजत और जिजिमय बोडड (िीस का भ गताि और भ गताि का माध्यम)
(संिोधि) जिजियम, 2017, अजधसूचिा सं. सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2016-17/037 [तारीख
29 माच,ड 2017 को अजधसूजचत भारतीय प्रजतभूजत और जिजिमय बोडड (िीस का भ गताि और भग ताि का
माध्यम) (संिोधि) जिजियम, 2017, अजधसूचिा स.ं सेबी/एल.ए.डी.-एि.आर.ओ./ िी.एि./2016-17/038
के सार् परठत], द्वारा[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 5
(च) 17 अप्रैल, 2020 को भारतीय प्रजतभूजत और जिजिमय बोड ड (रेग्यलू ेटरी सैंडबॉक्स) (संिोधि) जिजियम,
2020, सं. सेबी/एल.ए.डी.-एिआरओ/िीएि/2020/10, द्वारा
(छ) 3 अगस्ट्त, 2021 को भारतीय प्रजतभूजत और जिजिमय बोड ड (रेग्यूलेटरी सैंडबॉक्स) (संिोधि) जिजियम,
2021, सं. सेबी/एलएडी-एिआरओ/िीएि/2021/30, द्वारा
संिोजधत हुए र् े ।
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 28th January, 2022
SECURITIES AND EXCHANGE BOARD OF INDIA
{KYC (KNOW YOUR CLIENT) REGISTRATION AGENCY} (AMENDMENT)
REGULATIONS, 2022
No. SEBI/LAD-NRO/GN/2022/72.—In exercise of the powers under Section 30 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992), the Securities and Exchange Board of India hereby makes the
following regulations to further amend the Securities and Exchange Board of India {KYC (Know Your Client)
Registration Agency} Regulations, 2011, namely:—
1. These regulations may be called the Securities and Exchange Board of India {KYC (Know Your Client)
Registration Agency} (Amendment) Regulations, 2022.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations,
2011, –
I. In regulation 2, –
(i) in sub-regulation (1), after clause (d), the following new clause shall be inserted, namely, –
“(da) “change in control”, in relation to a KRA, means: ─
(i) if its shares are listed on any recognised stock exchange, change in control within the
meaning of regulations framed under clause (h) of sub-section (2) of section 11 of the
Act;
(ii) in any other case, change in the controlling interest;
Explanation. ─ For the purpose of sub-clause (ii), the expression “controlling interest” means,
(A) an interest, whether direct or indirect, to the extent of at least fifty-one percent of voting
rights; or
(B) right to appoint majority of the directors or to control the management directly or indirectly;”
(ii) in sub-regulation (1), in clause (h), the words and symbols “Companies Act, 1956” shall be replaced
with the words and symbols “Companies Act, 2013 (18 of 2013)”.
(iii) in sub-regulation (1), in clause (i), the word “prescribed” shall be replaced with the word
“specified”.
(iv) in sub-regulation (1), clause (k) and clause (l) shall be omitted.
(v) sub-regulation (2) shall be substituted with the following, namely, –
“(2) All other words and expressions used but not defined in these regulations shall have the same
meaning as have been assigned to them under the Act or the Securities Contracts (Regulation) Act,
1956 (42 of 1956), or the Depositories Act, 1996 (22 of 1996), or the Companies Act, 2013 (18 of
2013), or Prevention of Money Laundering Act, 2002
(15 of 2003) or any rules or regulations made thereunder or any statutory modification or
re-enactment thereto, as the case may be.”6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
II. In regulation 7, after sub-regulation (4), the following new sub-regulation shall be inserted, namely,
–
“(5) Where the KRA proposes change in control, it shall obtain prior approval of the Board for
continuing to act as such after the change.”
III. In regulation 14, the words and symbol “; as prescribed by the Board and” shall be omitted.
IV. In regulation 15,
(i) after the clause (d), the following new clause shall be inserted, namely, –
“(da) KRA shall carry out an independent validation of the KYC records uploaded onto its system by
the intermediary in such a manner as specified by the Board from time to time.”
(ii) in clause (e), the word “Rules” shall be replaced with the words and symbols “rules made under the
Prevention of Money Laundering Act, 2002 (15 of 2003)”.
(iii) in clause (k), the words “as prescribed by the Board” shall be replaced with the words “as specified by
the Board from time to time”.
(iv) after clause (o), the following new clause shall be inserted, namely, –
“(p) KRA shall maintain an audit trail of any upload/ modification /download regarding the KYC records
of each client.
V. In regulation 16, after clause (d), the following new clause shall be inserted, namely, –
“(e) The intermediary shall integrate its systems with the KRA to facilitate seamless movement of
KYC documents to and from the intermediary to the KRA.”
VI. In regulation 18, in sub-regulation (2), in clause (a), the words “as prescribed by the Board” shall be
replaced with the words “as specified by the Board from time to time”.
VII. In schedule I, in Form A, in Part I, in clause 1.10, after the words “practicing chartered accountant”,
the words and symbols “having a valid certificate of practice under sub section (1) of section 6 of
the Chartered Accountants Act, 1949 (38 of 1949)” shall be inserted.
AJAY TYAGI, Chairman
[Advt.-III/4/Exty./619/2021-22]
Footnote:
1. The Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations,
2011 were published in the Gazette of India on 2nd December, 2011 vide No. LAD-NRO/GN/2011-
12/29/36772.
2. The Securities and Exchange Board of India {KYC (Know Your Client) Registration Agency} Regulations,
2011 were subsequently amended on –
(a) 22nd March, 2013 by the Securities and Exchange Board of India {KYC (Know Your Client)
Registration Agency} (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2012-13/35/6998.
(b) 13th March, 2014 by the Securities and Exchange Board of India {KYC (Know Your Client)
Registration Agency} (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2013-14/46/522.
(c) 11th August, 2014 by the Securities and Exchange Board of India {KYC (Know Your Client)
Registration Agency} (Second Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-
15/05/23483.
(d) 8th December, 2016 by the Securities and Exchange Board of India (Change in Conditions of
Registration of Certain Intermediaries) (Amendment) Regulations, 2016 vide No. SEBI/LAD/
NRO/GN/2016-17/023.
(e) 6th March 2017, by the Securities and Exchange Board of India (Payment of Fees and Mode of
Payment) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/2016-17/037 read with 29th
March 2017, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment)
(Amendment) Regulations, 2017 vide Notification No. LAD-NRO/ GN/2016-17/038.[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 7
(f) 17th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment)
Regulations, 2020 vide Notification No. SEBI/LAD-NRO/GN/2020/10.
(g) 3rd August, 2021 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment)
Regulations, 2021 vide Notification No. SEBI/LAD-NRO/GN/2021/30.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.