Description
NSE notifies trading members that clients with KYC 'On Hold' status uploaded to KRAs between March 1-31, 2026 will be barred from trading and square-off from April 25, 2026. Exchange will flag non-compliant PANs until KRA validation is completed.
Summary
NSE’s Investor Services Cell, via Circular Ref. No. 20/2026 (NSE/ISC/73745) dated April 15, 2026, notifies all trading members that clients whose KYC records are ‘On Hold’ (unvalidated by KRAs) for KYC uploads made between March 1, 2026 and March 31, 2026 will be prohibited from trading and from squaring off open positions effective April 25, 2026. This circular is issued monthly in continuation of earlier circulars, the latest of which was NSE/ISC/73218 dated March 10, 2026.
Key Points
- Clients with KYC status ‘On Hold’ — covering both AADHAAR-based and Non-AADHAAR-based OVD — uploaded to KRAs during March 1–31, 2026 will not be permitted to trade or square off open positions from April 25, 2026.
- NSE will flag non-compliant PANs (as provided by KRAs) as ‘Not Permitted to Trade’ effective April 25, 2026.
- Open positions of non-compliant clients will not be forcibly closed; they will naturally expire on their respective contract expiry dates.
- Once a PAN becomes KRA-compliant, trading will be permitted on T+1 basis, based on information received from KRA on T Day.
- Demise data is being shared by KRAs on a daily basis; trading members must block debit transactions and inactivate/close UCC on all exchanges for deceased investors per SEBI Circular dated October 3, 2023.
- The list of non-compliant clients is available on the NSE member portal (ENIT > Log > Downloads) as
<TM Code>_Non-Validated_Clients_by_KRA.
Regulatory Changes
This circular is issued in pursuance of:
- 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.
- SEBI Circular SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163 dated October 3, 2023: Centralized mechanism for reporting investor demise through KRAs.
- NSE Circular NSE/ISC/73218 dated March 10, 2026: Previous monthly update on KYC/KRA guidelines.
The amendment to SEBI KYC (KRA) Regulations, 2011 mandates stricter KYC validation and timely compliance by all SEBI-regulated entities.
Compliance Requirements
- Trading Members must review the non-compliant client list on ENIT portal and proactively notify affected clients to complete KYC validation.
- All Regulated Entities registered with SEBI must block debit transactions — including suspension of all trading account transactions — and inactivate/close UCC on all stock exchanges for deceased investors reported by KRAs.
- Members must ensure clients resolve ‘On Hold’ KYC status before April 25, 2026 to avoid trading restrictions.
- Post-compliance, trading access is restored on T+1 basis after KRA updates NSE on T Day.
- For queries, contact: uci@nse.co.in or call Toll Free No. 1800 266 0050 (select option 5).
Important Dates
| Date | Event |
|---|---|
| March 1–31, 2026 | Period of KYC uploads to KRA that are subject to this circular’s restrictions |
| March 10, 2026 | Previous monthly circular issued (NSE/ISC/73218) |
| April 15, 2026 | This circular issued |
| April 25, 2026 | Effective date: Non-compliant clients barred from trading and square-off |
| T+1 | Date on which trading access is restored after a PAN becomes KRA-compliant |
Impact Assessment
Operational Impact (High): Trading members must urgently identify and contact clients in the non-compliant list before April 25, 2026. Failure to do so will result in those clients being unable to trade or square off positions, potentially leading to client dissatisfaction and compliance liability.
Client Impact (High): Affected clients — those with KYC uploaded to KRA between March 1–31, 2026 and still ‘On Hold’ — face a hard trading restriction. They cannot enter new trades or exit open positions manually; open positions will only expire naturally, exposing them to market risk.
Market Operations: No immediate market-wide disruption is expected, but members with large numbers of non-compliant clients may see reduced activity. The natural expiry mechanism for open positions avoids forced liquidation risk.
Demise Reporting: The ongoing daily sharing of demise data by KRAs requires continuous operational vigilance by trading members to promptly block and inactivate accounts, reducing fraud risk and regulatory exposure.
Impact Justification
Direct trading restriction with a hard deadline of April 25, 2026 affecting clients whose KYC remains unvalidated; impacts trading members' client onboarding and compliance obligations with immediate operational consequences.