NSE’s Investor Services Cell has issued Circular Ref. No. 28/2026 (NSE/ISC/74160) dated May 12, 2026, informing all trading members that clients whose KYC records were uploaded to KRAs between April 1–30, 2026 and remain in ‘On Hold’ status (for both Aadhaar and Non-Aadhaar based OVDs) will be barred from trading on the Exchange and from squaring off open positions with effect from May 23, 2026. This circular is issued in pursuance of the SEBI KYC (KRA) Regulations, 2011 and follows monthly circulars on this subject, the latest preceding one being NSE/ISC/73745 dated April 15, 2026.

Key Points

• Clients with KYC ‘On Hold’ status (KYC uploaded April 1–30, 2026) will not be permitted to trade from May 23, 2026.
• These clients will also not be allowed to square off open positions; such positions will expire naturally on the respective contract’s expiry date.
• NSE will flag non-compliant PANs (as provided by KRAs) as ‘Not Permitted to Trade’ effective May 23, 2026.
• 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 shared by KRAs on a daily basis; regulated entities must block debit transactions and suspend/inactivate trading accounts and UCC for deceased investors per SEBI Circular dated October 3, 2023.
• The non-compliant client list is available on the ENIT member portal under: ENIT > Log > Downloads, file: <TM Code>_Non-Validated_Clients_by_KRA.

Regulatory Changes

This circular operationalizes SEBI’s broader KYC framework reforms:

• SEBI/HO/MIRSD/FATF/P/CIR/2023/0144 (August 11, 2023): Simplification of KYC process and rationalisation of Risk Management Framework at KRAs.
• SEBI/HO/OIAE/OIAE_IAD-1/P/CIR/2023/0000000163 (October 3, 2023): Centralized mechanism for reporting investor demise through KRAs, requiring regulated entities to block/suspend accounts.
• The current circular enforces the consequence of non-validation — trading restriction — for KYC records uploaded during April 2026 that remain unvalidated.

Compliance Requirements

• Trading Members must review the non-compliant client list available on the ENIT portal and take proactive steps to notify affected clients.
• Clients with ‘On Hold’ KYC must complete the KYC validation process with the relevant KRA before May 23, 2026 to avoid trading restrictions.
• Regulated Entities must continue to block debit transactions and suspend trading accounts/UCC of deceased investors using daily demise data shared by KRAs.
• For queries, members should contact: uci@nse.co.in or Toll Free: 1800 266 0050 (option 5).

Important Dates

Impact Assessment

High impact for trading members and their clients. Any client whose KYC uploaded during April 2026 is still ‘On Hold’ will face an abrupt trading halt from May 23, 2026 — including inability to exit open derivative positions, which is a significant risk exposure. Open positions will not be forcibly closed but will be left to expire, potentially causing unintended losses for clients unable to manage their risk.

Trading members face operational burden to identify affected clients via the ENIT portal, communicate the restriction, and facilitate KYC remediation before the deadline. The T+1 restoration mechanism provides a relatively quick path to reinstatement once compliance is achieved, limiting prolonged disruption for clients who act promptly.