TMI Bloge-KYC Authentication facility under section 11A of the Prevention of Money Laundering Act, 2002 by Entities in the securities market for Resident InvestorsX X X X Extracts X X X X X X X X Extracts X X X X ..... tive Investment Funds (AIFs) 10. Collective Investment Schemes (CIS) 11. Custodians 12. Investment Advisors Dear Sir/Madam, Subject: e-KYC Authentication facility under section 11A of the Prevention of Money Laundering Act, 2002 by Entities in the securities market for Resident Investors 1. SEBI simplified the account opening process for investors vide Circular No. CIR/MIRSD/16/2011 dated August 22, 2011 . Further, SEBI vide circular MIRSD/SE/Cir-21/2011 dated October 05, 2011 issued guidelines for uniform KYC requirements for investors while opening accounts with any intermediary in the securities market. 2. SEBI vide Circular No. CIR/MIRSD/09/2012 dated August ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ministry of Finance issued a circular dated May 09, 2019 on procedure for processing of applications under section 11A of the Prevention of Money Laundering Act, 2002 ( PMLA ), for use of Aadhaar authentication services by entities other than the Banking companies. In terms of the said circular, if the Central Government is satisfied with the recommendations of the Regulator and Unique Identification Authority of India ( UIDAI ) and reporting entity complies with such standards of privacy and security under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 ( Aadhaar Act ), and it is necessary and expedient to do so, it may by notification, permit such entity to carry out authentication of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed efficiency and reduced time for client on-boarding would prefer to use Aadhaar based e-KYC facility to complete the KYC of the client. 9. These entities would be registered with UIDAI as KYC user agency ( KUA ) and shall allow all the SEBI registered intermediaries / mutual fund distributors to undertake Aadhaar Authentication of their clients for the purpose of KYC through them. 10. The SEBI registered intermediaries / mutual fund distributors, who want to undertake Aadhaar authentication services through KUAs, shall enter into an agreement with any one KUA and get themselves registered with UIDAI as sub-KUAs. The agreement in this regard shall be as may be prescribed by UIDAI. 11. Upon notification by the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the KUA. B. Assisted Investor (Resident) e-KYC process (Aadhaar as an OVD) a. Investor approaches any of the SEBI Registered Entity/ Sub-KUAs i.e. Mutual Fund Distributors or appointed persons for e-KYC through Aadhaar. b. SEBI registered entities (Sub-KUAs) will perform e-KYC using registered / Whitelisted devices with KUAs. c. KUA will ensure that all devices and device operators of Sub-KUA are registered / whitelisted devices with KUA. d. Investor will enter Aadhaar No. or Virtual Id and provides consent on the registered device. e. Investor provides biometric on the registered device. f. SEBI registered intermediary (Sub-KUA) fetches the e-KYC details through the KUA f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only last 4 digits of Aadhaar number may be displayed. g. As per Regulation 14(i) of the Aadhaar (Authentication) Regulation, 2016, requesting entity shall implement exception-handling mechanisms and backup identity authentication mechanism to ensure seamless provision of authentication services to Aadhaar number holders. h. UIDAI may conduct audit of all KUAs and Sub KUAs as per the Aadhaar Act, Aadhaar Regulations, AUA/KUA Agreement, Guidelines, circulars etc. issued by UIDAI from time to time. i. Monitoring of irregular transactions - KUAs shall develop appropriate monitoring mechanism to record irregular transactions and their reporting to UIDAI. j. Investor Grievance Handling Mechanism - Investor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y out Aadhaar Authentication Services under section 11A of PMLA . Based on a report from SEBI / UIDAI or otherwise, if it is found that the reporting entity no longer fulfills the requirements for performing authentication under clause (a) of section 11A(1) of PMLA , the Central Government may withdraw the notification after giving an opportunity to the reporting entity. 16. Upon notification by the Central Government permitting the entities recommended by SEBI to undertake Aadhaar based authentication, the Circulars issued in the past by SEBI for e-KYC using Aadhaar based authentication shall stand modified/ revised in compliance with this Circular. 17. This Circular is issued by SEBI in exercise of powers conferred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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