Description

BSE circular on KYC compliance requirements, blocking non-validated clients from trading, and centralized reporting of investor demise.

Summary

BSE issues guidelines following SEBI KYC Registration Agency Regulations amendments. Key measures include blocking trading for clients with non-validated KYC from July 2025, implementing centralized reporting mechanism for deceased investors, and establishing daily compliance monitoring by KRAs.

Key Points

  • Clients with “On Hold” KYC status from July 1-31, 2025 will be blocked from trading effective August 25, 2025
  • Trading members must block debit transactions and inactivate accounts for deceased investors reported by KRAs
  • Exchange will flag non-compliant PANs as “Not Permitted to Trade” from August 23, 2025
  • Compliant clients will be permitted to trade on T+1 basis after validation
  • Open positions of blocked clients will naturally expire on contract expiry dates

Regulatory Changes

  • Amendment to SEBI KYC Registration Agency Regulations 2011
  • Introduction of centralized mechanism for reporting investor demise through KRAs
  • Daily reporting system for non-compliant PANs by KRAs to trading members
  • Automated flagging system for non-validated KYC clients

Compliance Requirements

  • Trading members must ensure compliance with SEBI circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163 dated October 3, 2023
  • Block debit transactions in trading accounts for deceased investors reported by KRAs
  • Inactivate/close UCC in all stock exchanges for deceased investor PANs
  • Monitor daily PAN lists from KRAs for compliance status
  • Access non-compliant client lists from specified file path: \EQ\Transaction\August-2025\12-08-2025

Important Dates

  • July 1-31, 2025: Period for KYC uploads subject to validation requirements
  • August 23, 2025: Exchange begins flagging non-compliant PANs
  • August 25, 2025: Trading restrictions effective for non-validated KYC clients
  • T+1: Compliant clients permitted to trade after validation

Impact Assessment

High impact on market participants with potential trading disruptions for clients with non-validated KYC. Enhanced compliance burden on trading members for daily monitoring and account management. Strengthened investor protection through improved KYC validation and deceased investor account management.

Impact Justification

Trading restrictions for non-compliant KYC clients affecting market access