Description

BSE informs trading members that clients with KYC 'On Hold' status uploaded between February 1-28, 2026 will be barred from trading and squaring off positions effective March 21, 2026, until KRA validation is completed.

Summary

BSE has issued guidelines pursuant to SEBI’s KYC Registration Agency (KRA) Regulations, 2011, notifying trading members that clients whose KYC records remain ‘On Hold’ (unvalidated by KRAs) for uploads made between February 1–28, 2026, will be prohibited from trading and from squaring off open positions effective March 21, 2026. Open positions of such clients will only expire naturally on contract expiry dates.

Key Points

  • Clients with KYC status ‘On Hold’ (both Aadhaar and Non-Aadhaar OVD-based) uploaded to KRAs from February 1–28, 2026 will not be permitted to trade on BSE from March 21, 2026.
  • These clients will also be barred from squaring off open positions; such positions will expire naturally on contract expiry.
  • BSE will flag non-compliant PANs (as provided by KRAs) as ‘Not Permitted to Trade’ from March 21, 2026.
  • PANs that subsequently achieve KRA compliance will be permitted to trade on T+1 basis after BSE receives KRA confirmation on T Day.
  • Demise data is being shared by KRAs daily; regulated entities must block debit transactions and suspend trading accounts of deceased investors.
  • Non-compliant client list is available at: \EQ\Transaction\March-2026\10-03-2026 as Non_Validated_Clients_by_KRAs_Clgno_xxxx.TXT.

Regulatory Changes

  • References SEBI Circular No. SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 dated August 11, 2023 on simplification of KYC process and rationalisation of KRA Risk Management Framework.
  • References SEBI Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163 dated October 3, 2023 on centralized mechanism for reporting investor demise through KRAs.
  • Continuation of monthly Exchange circulars on KRA guidelines; latest prior notice was 20260213-9 dated February 13, 2026.

Compliance Requirements

  • Trading members must ensure their clients complete KYC validation with KRAs before March 21, 2026 to avoid trading restrictions.
  • Members must check the non-compliant client list provided by BSE and proactively notify affected clients.
  • All regulated entities must block debit transactions and inactivate/close UCC in all stock exchanges for deceased investors as per KRA demise data shared daily.
  • For queries, members may contact BSE at 022-2272 8435 / 5785 or email ucc@bseindia.com.

Important Dates

  • February 1–28, 2026: Period of KYC uploads subject to this restriction (KYCs uploaded but not validated by KRAs).
  • March 10, 2026: Circular issuance date; non-compliant client list made available.
  • March 21, 2026: Effective date — non-KRA-validated clients barred from trading and squaring off positions.
  • T+1: Date from which a client becomes eligible to trade again after achieving KRA compliance (based on KRA confirmation received on T Day).

Impact Assessment

This circular has high operational impact on trading members with clients who have recently undergone KYC onboarding or updates. Any client with a pending or rejected KYC validation between February 1–28, 2026 faces trading suspension from March 21, 2026. Members must act promptly to identify affected clients, communicate the requirement, and facilitate re-validation. The restriction also prevents position squaring, which could expose clients to market risk if open derivative positions cannot be managed. The natural expiry provision mitigates some risk but does not allow active risk management by the client.

Impact Justification

Directly restricts trading access for non-KRA-validated clients from March 21, 2026, affecting any member with clients whose KYC uploads in February 2026 remain unvalidated; requires immediate action by trading members to ensure client compliance.