Description

BSE implements trading restrictions for clients with non-validated KYC status and establishes centralized mechanism for reporting investor demise through KRAs.

Summary

BSE has issued guidelines following SEBI amendments to KYC Registration Agency Regulations, implementing strict trading restrictions for clients with non-validated KYC status and establishing a centralized mechanism for reporting investor demise through KRAs.

Key Points

  • KRAs will provide daily lists of PANs declared as deceased investors
  • Trading members must block debit transactions and inactivate UCCs for deceased investor PANs
  • Clients with “On Hold” KYC status from August 1-31, 2025 will face trading restrictions
  • Non-compliant clients cannot trade or square up positions from September 22, 2025
  • Exchange will flag non-compliant PANs as “Not Permitted to Trade” from September 20, 2025

Regulatory Changes

  • Implementation of centralized mechanism for reporting investor demise through KRAs
  • Enhanced KYC validation requirements affecting both AADHAAR and Non-AADHAAR based OVD
  • Automatic flagging system for non-compliant PANs by the Exchange

Compliance Requirements

  • Trading members must receive daily PAN lists from KRAs for deceased investors
  • Block debit transactions and inactivate/close UCCs for deceased investor PANs
  • Ensure clients with non-validated KYC cannot trade or square up positions
  • Monitor and comply with KRA validation requirements for all client accounts
  • Access non-compliant client lists from specified file path: \EQ\Transaction\September-2025\10-09-2025

Important Dates

  • August 1-31, 2025: KYC validation period for affected clients
  • September 20, 2025: Exchange begins flagging non-compliant PANs
  • September 22, 2025: Trading restrictions effective for non-validated KYC clients
  • T+1: KRA compliant clients permitted to trade after validation

Impact Assessment

High impact on trading operations as clients with non-validated KYC will be unable to trade or close positions, potentially affecting market liquidity. Trading members must implement robust compliance systems to handle daily PAN updates and maintain accurate client status records. Open positions of non-compliant clients will expire naturally on contract expiry dates.

Impact Justification

Affects all trading members and clients with non-validated KYC status, imposing immediate trading restrictions