Description

SEBI extends the deadline for trading members to upload client KYC records to KRAs to April 03, 2026. Non-compliant clients will be restricted from trading and squaring off positions.

Summary

BSE has extended the deadline for trading members to upload client KYC records to KYC Registration Agencies (KRAs) to April 03, 2026, following multiple requests from trading members. SEBI originally mandated a 3-working-day timeline for KYC uploads as per circular dated October 12, 2023. A sample verification revealed several trading members have not complied with this requirement. Only clients with KRA status of “KYC Registered” or “KYC Validated” are permitted to trade. Non-compliant PANs will be restricted from trading and will not be allowed to square off open positions after the deadline.

Key Points

  • Deadline extended to April 03, 2026 for uploading client KYC records to KRAs
  • Original SEBI requirement mandated 3-working-day timeline from completion of KYC process (SEBI Circular dated October 12, 2023)
  • Sample comparison revealed multiple trading members have not complied with the revised timeline
  • Only clients with “KYC Registered” or “KYC Validated” status permitted to trade
  • Non-validated PANs will be restricted from trading and squaring off open positions
  • Trading members must monitor open positions of non-compliant clients
  • Members should contact respective KRAs for queries on client KRA status

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 required intermediaries to upload KYC to KRAs within 10 working days from execution of documents by client

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

  3. Trading permissions: SEBI Circular SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 dated August 11, 2023 allows clients to transact upon KYC completion, but clients whose KYC attributes cannot be verified must not transact until verification is completed

Compliance Requirements

For Trading Members:

  • Upload all pending client KYC records to KRAs by April 03, 2026
  • Ensure all trading clients have KRA status of “KYC Registered” or “KYC Validated”
  • Closely monitor open positions of clients with non-validated KRA status
  • 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

For Clients:

  • Clients without validated KRA status will not be permitted to trade on the Exchange
  • Clients with non-validated PANs will not be allowed to square up open positions after April 03, 2026

Important Dates

  • January 30, 2026: Notice date
  • April 03, 2026: Extended deadline for uploading client records to KRAs
  • December 24, 2025: Previous exchange notice (20251224-25) regarding this matter
  • October 12, 2023: SEBI revised KYC upload timeline to 3 working days
  • August 11, 2023: SEBI circular on simplification of KYC process
  • December 23, 2011: Original SEBI circular on 10-day KYC upload requirement

Impact Assessment

Market Impact:

  • High impact on trading members who have not complied with KYC upload requirements
  • Potential disruption to client trading activities if records are not uploaded by deadline
  • Clients with non-validated KRA status will face trading restrictions after April 03, 2026

Operational Impact:

  • Trading members must prioritize uploading pending KYC records within extended timeline
  • Additional operational burden to verify and monitor KRA status of all clients
  • Need to manage open positions of clients with non-validated status before deadline
  • Risk of client dissatisfaction due to trading restrictions if compliance not met

Compliance Impact:

  • Non-compliance with regulatory requirements on KYC uploads to KRAs
  • Essential for ensuring interoperability across market participants
  • Failure to comply will result in trading restrictions and inability to close positions
  • Members must coordinate with multiple KRAs for status verification and issue resolution

Impact Justification

Critical compliance requirement affecting all trading members. Non-compliance will result in trading restrictions for clients, impacting market operations and investor access.