Description

BSE notifies that clients with KYC 'On Hold' status uploaded to KRAs between March 1–31, 2026 will be barred from trading and squaring off open positions effective April 25, 2026, pursuant to SEBI KRA Regulations amendment.

Summary

BSE has issued guidelines pursuant to the SEBI KYC (Know Your Client) Registration Agency (KRA) Regulations, 2011 amendment. Clients whose KYC records were uploaded to KRAs between March 1–31, 2026 and remain in ‘On Hold’ status (unvalidated, for both Aadhaar and Non-Aadhaar OVD) will be barred from trading and from squaring off open positions effective April 25, 2026. This notice is part of a recurring monthly circular series, with the latest prior notice being No. 20260310-17 dated March 10, 2026.

Key Points

  • Clients with KYC ‘On Hold’ status uploaded between March 1–31, 2026 will not be permitted to trade on BSE from April 25, 2026
  • Affected clients will also be prohibited from squaring off any existing open positions; such positions will naturally expire on their respective contract expiry dates
  • BSE will flag non-compliant PANs (as provided by KRAs) as ‘Not Permitted to Trade’ effective April 25, 2026
  • PANs that subsequently achieve KRA compliance will be permitted to trade on T+1 basis, based on KRA data received by BSE on T Day
  • Demise data is being shared by KRAs on a daily basis; regulated entities must block debit transactions and inactivate/close UCC in all stock exchanges for deceased investors
  • A list of non-compliant clients is available at the Exchange’s designated file path: April-2026\15-04-2026\EQ\Transaction, file: 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 Risk Management Framework at KRAs
  • 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
  • Continues the monthly circular framework for KYC compliance enforcement with rolling monthly KYC upload windows

Compliance Requirements

  • Trading Members must identify clients whose KYC was uploaded to KRAs between March 1–31, 2026 and currently remains ‘On Hold’
  • Members should proactively notify affected clients to complete KYC validation before April 25, 2026 to avoid trading disruption
  • For deceased investors, all regulated entities must block debit transactions, suspend all trading account transactions, and inactivate/close the UCC across all stock exchanges
  • Members should download and review the non-compliant client list from the Exchange’s designated file path

Important Dates

  • March 1–31, 2026: KYC upload window in scope for this circular
  • April 15, 2026: Circular issuance date; non-compliant client list made available
  • April 25, 2026: Effective date — non-compliant clients barred from trading and squaring off open positions
  • T+1: Date from which KRA-compliant PANs are re-permitted to trade after compliance is achieved

Impact Assessment

This circular has a high operational impact on trading members and their clients. Any client with an unresolved ‘On Hold’ KYC status from the March 2026 upload window faces a hard trading suspension from April 25, 2026, with no ability to even close open derivative positions — those will be left to expire naturally, potentially resulting in significant financial exposure. Brokers must urgently cross-reference the provided non-compliant PAN list against their client base and initiate remediation. The T+1 reinstatement mechanism provides a path to resolution, but requires KRA-side validation completion. Members should contact BSE at 022-2272-8435/5785 or ucc@bseindia.com for clarifications.

Impact Justification

Directly restricts trading access for non-KYC-compliant clients from April 25, 2026; affects brokers and their clients with 'On Hold' KYC statuses; requires immediate action by trading members to identify and notify affected clients.