Description
BSE notifies trading members that clients with KYC 'On Hold' status uploaded between February 1-28, 2026 will be barred from trading and squaring off open 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 amendment. Clients whose KYC records were uploaded to KRAs between February 1–28, 2026 and remain in ‘On Hold’ status (both Aadhaar and Non-Aadhaar OVD) will be barred from trading and from squaring off open positions effective March 21, 2026. Open positions will be allowed to expire naturally on contract expiry.
Key Points
- Clients with KYC ‘On Hold’ status uploaded to KRA between February 1–28, 2026 will face trading restrictions from March 21, 2026
- Both Aadhaar-based and Non-Aadhaar OVD KYC records are covered under this restriction
- Such clients will neither be permitted to trade nor allowed to square off open positions
- Open positions will expire naturally on the expiry date of the respective contract
- BSE will flag non-compliant PANs (as provided by KRAs) as ‘Not Permitted to Trade’ from March 21, 2026
- Clients who subsequently become KRA-compliant will be permitted to trade on T+1 basis after KRA shares information with the Exchange on T Day
- Non-compliant client list is available at:
\EQ\Transaction\March-2026\10-03-2026 Non_Validated_Clients_by_KRAs_Clgno_xxxx.TXT - Demise data is being shared by KRAs daily; all debit transactions in accounts of deceased investors must be blocked per SEBI Circular dated October 3, 2023
Regulatory Changes
- Reference: SEBI Circular SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 dated August 11, 2023 — Simplification of KYC process and rationalisation of Risk Management Framework at KRAs
- Reference: SEBI Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163 dated October 3, 2023 — Centralized mechanism for reporting investor demise through KRAs
- Latest prior Exchange notice: 20260213-9 dated February 13, 2026
- All SEBI-registered Regulated Entities must inactivate/close UCC in all Stock Exchanges for deceased investors
Compliance Requirements
- Trading Members must ensure clients with KYC ‘On Hold’ status are aware of the upcoming trading restriction
- Members must block debit transactions and suspend all trading account activity for deceased investors upon receiving demise data from KRAs
- Members should direct non-compliant clients to complete KRA validation requirements before March 21, 2026 to avoid trading disruption
- Members can download the list of non-compliant PANs from the specified file path on BSE systems
- Contact for clarifications: 022-2272 8435 / 5785 or ucc@bseindia.com
Important Dates
| Date | Event |
|---|---|
| February 1–28, 2026 | Period for which ‘On Hold’ KYC uploads are affected |
| March 10, 2026 | Circular issued; non-compliant client list published |
| March 21, 2026 | Trading restriction effective date for non-compliant clients |
| T+1 | Date from which compliant clients are permitted to resume trading after KRA validation |
Impact Assessment
This circular has a high operational impact on trading members and their clients. Any client whose KYC was uploaded to a KRA in February 2026 and remains unvalidated faces a hard trading block from March 21, 2026 — with no ability to trade or manage open positions. This could result in financial loss for affected investors whose open positions cannot be actively managed and will only expire on contract maturity. Trading members must proactively identify affected clients, communicate the restriction, and facilitate KYC remediation before the deadline. The restriction applies broadly to both equity and derivatives segments.
Impact Justification
Directly restricts trading access for clients with non-validated KYC uploaded Feb 1-28, 2026, effective March 21, 2026 — affects broker operations and client onboarding compliance across all trading members.