2012: Get New Demat Accounts in Just Ten Days

The Indian capital markets regulator, SEBI ( Securities and Exchange Board of India), on recently issued detailed guidelines for faster opening of demat accounts by new clients under the new KYC Registration Agency (KRA) set up by SEBI.

The demat account opening process under the new system is expected to take Ten working days and will be less cumbersome and time consuming than the existing process.

SEBI said in a circular issued,  “The new guidelines for opening demat accounts through KRA shall be applicable for all new client accounts opened from January 1, 2012. The names of the KRAs would be notified separately"

SEBI also issued fresh guidelines to be followed by the intermediaries, who shall, henceforth, upload the KYC information on the system of KRA and send the KYC documents, which are the KYC application form and supporting documents, of the clients to KRA within ten working days from the date of execution of documents by the applicants. It has already notified the eligibility criteria for the KRAs.

To start with, for all the client account opened between January 1 and January 31, 2012, SEBI has relaxed the ten working days time period for sending KYC details and documents to their respective KRAs. They can upload the KYC data on the KRA system and send the relevant KYC document to KRA by February 15, 2012. But from February 1, 2012, the account opening process shall take only ten working days.

SEBI also said, “For client accounts opened from February 1, the intermediaries shall continue to follow the requirement of sending the same within 10 working days from the date of execution of documents by the client.

Once the client’s initial KYC is done and other formalities completed, they will be eligible to trade
through their intermediary. A client can start trading/investing/dealing with the intermediary and its group/subsidiary/holding company as soon as the initial KYC is done and other necessary information is obtained, while the remaining process of KRA is in progress.".

KRA shall send a letter to the client within ten working days of the receipt of the KYC documents from intermediaries, the regulator SEBI has decreed.

“While conducting inperson verification (IPV) by share brokers and DPs (Depository Participants), the intermediary shall ensure that details, like name of the person conducting IPV, his designation, organisation name with his signatures and date are recorded on the KYC form at the time of IPV..

In case of Mutual Funds, their Asset Management Company's (AMCs) and the distributors certified by National Institute of Securities Market or Association of Mutual Funds in India (AMFI), can perform IPV. In case of applications received by Mutual Funds directly from the clients (not through any distributor), they may also rely upon the IPV performed by the bank.

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