SEBI to Implement Centralized KYC Reporting for Deceased Investors

The Securities and Exchange Board of India (Sebi) has unveiled a new framework aimed at streamlining the process of reporting and verification in the event of an investor’s demise. This initiative introduces a centralized mechanism managed by the KYC Registration Agency and establishes operational norms for regulated entities and registered intermediaries interacting with individual investors. The framework is set to be effective from January 1, 2024.

Centralized Mechanism for Reporting

Sebi has introduced a central reporting mechanism through the KYC Registration Agency (KRA) for cases involving the demise of an investor. Listed companies looking to provide access to this mechanism for investors holding physical securities can establish connectivity with KRA through their Registrar and Transfer Agents (RTAs).

Verification Process

Upon receiving notification of an investor’s demise, the relevant intermediary must obtain the death certificate and PAN from the notifier or nominee. Subsequently, the intermediary is required to verify the death certificate, either through online or offline means.

“On Hold” Status:

If the intermediary cannot obtain the death certificate, they must inform the nominee that the KYC status of the deceased investor has been flagged as “On Hold.” The nominee will then be required to provide the death certificate.

KYC Modification Request

After successfully verifying the death certificate, the intermediary must, on the same day of verification, submit a KYC modification request to the KRA, indicating that “information on death of investor received; death certificate verified.” Additionally, they should upload the relevant documents. All debit transactions in the account or folios of the deceased investor should be blocked.

Confirmation Awaited

In cases where the death certificate has not been received, the intermediary must, by the next working day following the intimation, submit a KYC modification request in the KRA system labeled as “information on death of investor received; confirmation awaited.”

KRA’s Role

Sebi has outlined the responsibilities of the KRA, which includes conducting independent verification upon receiving a KYC modification request from the intermediary by the next working day. After validating the death certificate, the KRA will update the KYC record as ‘blocked permanently’ in the system and notify all linked intermediaries.



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