Sebi announcement adapdation of aadhaar card on KYC documents

¼ããÀ¦ããè¾ã ¹ãÆãä¦ã¼ãîãä¦ã ‚ããõÀ ãäÌããä¶ã½ã¾ã ºããñ¡Ã Securities and Exchange Board of India Page 1 of 4 CIRCULAR CIR/MIRSD/29/2016 January 22, 2016 1. All Recognized Stock Exchanges 2. Stock Brokers through Recognized Stock Exchanges 3. All recognised Depositories 4. Depository Participants through Depositories 5. Association of Mutual Funds in India 6. Mutual funds through AMFI 7. Portfolio Managers 8. KYC Registration Agencies (KRAs) 9. Alternative Investment Funds (AIFs) 10. Collective Investment Schemes (CIS) 11. Custodians Dear Sir/Madam, Sub: Know Your Client Requirements - Clarification on voluntary adaptation of Aadhaar based e-KYC process 1. The Hon'ble Supreme Court, in Writ Petition (Civi l) No. 494 of 2012 in the matter of Justice K.S.Puttaswamy (Retd.) & Another vs Union of Ind ia & Others, vide order dated August 11, 2015 and October 15, 2015 directed th at the usage of the Aadhaar card as issued by the Unique Identification Auth ority of India (UIDAI) is voluntary. In view of the said orders, the usage of A adhaar card is optional and purely on a voluntary basis, subject to the final judgm ent of the Hon’ble Supreme Court in the aforesaid petition. 2. SEBI circular dated October 8, 2013, enables Aadhaar based e-KYC service offered by UIDAI for KYC verification on authorisatio n by the client to the intermediary on a voluntary basis. Clarification on cer tain operational aspects of the said circular is provided at Annexure A. 3. It may be noted that the provisions laid down unde r the Prevention of Money- Laundering Act, 2002, Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, SEBI Master Circular on Anti Money Launde ring (AML) dated December 31, 2010 and SEBI Circular on AML dated March 12, 2014 and relevant KYC circulars issued from time to time shall continue to remain applicable. ¼ããÀ¦ããè¾ã ¹ãÆãä¦ã¼ãîãä¦ã ‚ããõÀ ãäÌããä¶ã½ã¾ã ºããñ¡Ã Securities and Exchange Board of India Page 2 of 4 4. This clarificatory circular is issued in exercise of the p owers conferred under Section 11(1) of the Securities and Exchange Board of I ndia Act, 1992 to protect the interests of investors in securities and to promote t he development of and to regulate the securities market. Yours faithfully, D Rajesh Kumar Deputy General Manager 022-26449242 Email: rajeshkd@sebi.gov.in Encl: Annexure A – Clarification on voluntary adaptation of Aadhaar based e-KYC process ¼ããÀ¦ããè¾ã ¹ãÆãä¦ã¼ãîãä¦ã ‚ããõÀ ãäÌããä¶ã½ã¾ã ºããñ¡Ã Securities and Exchange Board of India Page 3 of 4 Annexure - A Clarification on voluntary adaptation of Aadhaar ba sed e-KYC process SEBI vide circular dated October 8, 2013, enabled Aadh aar based e-KYC service offered by UIDAI for KYC verification. Intermediaries have sought clarifications from SEBI on certain operational aspects of the same. It is clarified that for accessing the details enabling cli ent identification and authentication from UIDAI based on client authorisation, on voluntary basis, intermediaries who utilize the services of KYC Service Agencies (KSAs) would be regist ered as KYC User Agencies (KUA) with UIDAI. 1. For entering into account based relationship, the cl ient may provide the following information to the intermediary: i. Name ii. Aadhaar number iii. Permanent Account Number (PAN) 2. The above information can be provided by the clien t electronically including through any web enabled device. 3. The intermediary shall perform verification of th e client with UIDAI through biometric authentication (fingerprint or iris scanning). Mutual F unds can also perform verification of the client with UIDAI through One Time password (OT P) received on client’s mobile number or on e-mail address registered with UIDAI prov ided, the amount invested by the client does not exceed Rs. 50,000 per financial year per Mutual Fund and payment for the same is made through electronic transfer from the client’s bank account registered with that Mutual Fund. 4. PAN of such client is to be verified from the income tax website. 5. After due validation of Aadhaar number provided by the client, the intermediary (acting as KUA) shall receive the KYC information about the cli ent from UIDAI through KSA. 6. The information downloaded from UIDAI shall be con sidered as sufficient information for the purpose of KYC verification. The intermediary shall upload this KYC information on the KRA system in terms of KRA Regulat ions. 7. In case material difference is observed either in th e name (as observed in the PAN vis-a-vis Aadhaar) or photograph in Aadhaar is not clea r, the intermediary shall carry ¼ããÀ¦ããè¾ã ¹ãÆãä¦ã¼ãîãä¦ã ‚ããõÀ ãäÌããä¶ã½ã¾ã ºããñ¡Ã Securities and Exchange Board of India Page 4 of 4 out additional due diligence and maintain a record of the additional documents sought pursuant to such due diligence. 8. The records of KYC information so received shall be maintained by the intermediary as per the SEBI Act, Regulations and various circulars issue d thereunder.