Description

BSE extends the deadline for Trading Members to upload client KYC records to KRAs from the previously mandated 3-day timeline to April 03, 2026, following multiple extension requests.

Summary

BSE has extended the deadline for Trading Members to upload client KYC records to KRAs (KYC Registration Agencies) to April 03, 2026. This extension follows multiple requests from Trading Members who have struggled to comply with the revised 3-working-day timeline mandated by SEBI Circular SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 dated October 12, 2023. After the extended deadline, only clients with KRA status of “KYC Registered” or “KYC Validated” will be permitted to trade, and non-compliant PANs will face trading restrictions.

Key Points

  • Original timeline of 10 working days for KYC uploads was revised to 3 working days by SEBI in October 2023
  • Sample verification revealed several Trading Members have not complied with the 3-day timeline
  • Extension granted until April 03, 2026 for uploading client records to KRAs
  • Only clients with “KYC Registered” or “KYC Validated” status can trade
  • Post-deadline, PANs not validated by KRAs will not be permitted to trade or square up open positions
  • Members must closely monitor open positions of such clients
  • For KRA status queries, members should contact respective KRAs directly

Regulatory Changes

The circular references the evolution of KYC upload timelines:

  1. Original requirement (2011): SEBI Circular MIRSD/Cir-26/2011 dated December 23, 2011 mandated KYC upload within 10 working days from document execution

  2. Revised timeline (2023): SEBI Circular SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169 dated October 12, 2023 shortened this to 3 working days from KYC process completion

  3. Client transaction rules: SEBI Circular SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 dated August 11, 2023 allows clients to transact upon KYC completion, but restricts further transactions if KYC attributes cannot be verified

  4. Current extension: Timeline extended to April 03, 2026 for compliance with KYC upload requirements

Compliance Requirements

For Trading Members:

  • Upload all pending client KYC records to KRAs by April 03, 2026
  • Ensure client KRA status is either “KYC Registered” or “KYC Validated” for trading permission
  • Monitor open positions of clients whose KYC may not be validated
  • Take appropriate measures to ensure compliance before the deadline
  • Contact respective KRAs directly for any queries or issues related to client KRA status
  • Ensure seamless interoperability across market participants

Trading Restrictions:

  • PANs not validated by KRAs after April 03, 2026 will not be permitted to trade
  • Such clients will also not be allowed to square up existing open positions

Important Dates

  • Notice Date: January 30, 2026
  • Compliance Deadline: April 03, 2026
  • Previous Notice Referenced: Notice no 20251224-25 dated December 24, 2025
  • Referenced SEBI Circulars:
    • December 23, 2011 (MIRSD/Cir-26/2011)
    • August 11, 2023 (SEBI/HO/MIRSD/FATF/P/CIR/2023/0144)
    • October 12, 2023 (SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169)

Impact Assessment

Operational Impact:

  • Trading Members have approximately 2 months to complete pending KYC uploads
  • Members must audit their client databases and identify PANs not yet uploaded to KRAs
  • Potential operational burden on compliance and KYC teams to meet the deadline
  • Members with large client bases may need to prioritize clients with active positions

Market Impact:

  • Clients whose KYC is not uploaded by the deadline will face trading restrictions
  • Potential investor inconvenience if KYC compliance is not completed in time
  • Risk of clients being unable to square off positions after April 03, 2026 if KYC not validated
  • Enhancement of market integrity through proper KYC validation and interoperability

Risk Mitigation:

  • Members should immediately identify non-compliant PANs through comparison with KRA databases
  • Priority should be given to clients with existing open positions
  • Proactive communication with clients may be necessary to complete pending KYC requirements
  • Coordination with KRAs essential to resolve validation issues before the deadline

Impact Justification

Critical compliance matter affecting all Trading Members. Non-compliance results in trading restrictions for clients whose KYC is not uploaded to KRAs. Extension provides relief but emphasizes strict enforcement after April 03, 2026.