Description

NSE mandates that clients with KYC 'On Hold' status uploaded to KRA between October 1-31, 2025 will be blocked from trading and squaring off positions from November 22, 2025 until validation requirements are met.

Summary

NSE has issued guidelines regarding KYC validation requirements following SEBI’s amendments to KRA Regulations. Clients whose KYC records are ‘On Hold’ with KRAs (both Aadhaar and Non-Aadhaar based OVD) uploaded between October 1-31, 2025 will be prohibited from trading on the Exchange from November 22, 2025. These clients will also be unable to square off open positions until they complete validation requirements. The Exchange will flag non-compliant PANs as ‘Not Permitted to Trade’ based on data provided by KRAs.

Key Points

  • Clients with KYC status ‘On Hold’ at KRAs will face trading restrictions from November 22, 2025
  • Applies to KYCs uploaded to KRA between October 1, 2025 and October 31, 2025
  • Covers both Aadhaar-based and Non-Aadhaar based OVD KYCs
  • Affected clients cannot trade or square off open positions
  • Open positions will naturally expire on contract expiry date
  • KRAs share demise data daily; trading members must block debit transactions and suspend trading accounts for deceased investors
  • PANs becoming KRA compliant will be permitted to trade on T+1 basis
  • Non-compliant client lists available on NSE member portal

Regulatory Changes

This circular is issued pursuant to:

  • SEBI Circular No. SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 dated August 11, 2023
  • Previous NSE Circular NSE/ISC/70772 dated October 13, 2025 on “Simplification of KYC process and rationalisation of Risk Management Framework at KRAs”
  • SEBI Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163 dated October 03, 2023 regarding centralized mechanism for reporting investor demise through KRAs

The amendments strengthen KYC validation requirements and introduce stricter enforcement mechanisms for non-validated clients.

Compliance Requirements

For Trading Members:

  • Monitor and identify clients with ‘On Hold’ KYC status
  • Access non-compliant client lists from NSE member portal: https://enit.nseindia.com/MemberPortal/
  • File path: ENIT > Log > Downloads
  • File format: _Non-Validated_Clients_by_KRA
  • Block debit transactions and suspend trading accounts for deceased investors based on daily KRA demise data
  • Inactivate/close UCC (Unique Client Code) in all stock exchanges for deceased investors
  • Contact uci@nse.co.in for queries

For Clients:

  • Ensure KYC records are validated by KRAs before November 22, 2025
  • Complete validation requirements for KYCs uploaded between October 1-31, 2025
  • Comply with both Aadhaar and Non-Aadhaar based OVD validation norms

Important Dates

  • October 1-31, 2025: Period during which affected KYCs were uploaded to KRA
  • November 11, 2025: Circular issue date (Circular Ref. No: 43/2025, Download Ref No: NSE/ISC/71227)
  • November 22, 2025: Effective date for trading restrictions on non-validated clients
  • T+1: Clients becoming KRA compliant will be permitted to trade one day after compliance

Impact Assessment

Market Impact:

  • Medium to high impact depending on number of affected clients
  • Potential reduction in trading volumes if significant client base remains non-compliant
  • Open positions held by non-compliant clients will expire naturally, potentially affecting market liquidity

Operational Impact:

  • Trading members must urgently review and update client KYC compliance status
  • Systems need to flag and block non-compliant PANs from November 22, 2025
  • Daily monitoring required as KRA updates compliance status
  • Support infrastructure needed to assist clients in completing validation requirements

Client Impact:

  • High severity for affected clients who risk losing trading access
  • Clients cannot square off open positions, exposing them to expiry risks
  • Urgent action required before November 22, 2025 deadline to avoid trading disruption
  • Clients achieving compliance can resume trading on T+1 basis

Impact Justification

High importance as it will directly block trading access for non-compliant clients from November 22, 2025, affecting their ability to trade or square off open positions. Critical compliance deadline with immediate operational impact on trading members and their clients.