On May 12, 2020, the Securities and Exchange Board of India (“SEBI”) issued a circular (“Original Circular”) listing entities who shall undertake e-KYC Aadhar authentication service of Unique Identification Authority of India (“UIDAI”) as a KYC user agency (“KUA”) in the securities market. The Original Circular also provided that SEBI registered intermediaries shall be allowed to undertake Aadhar authentication of their clients as sub-KUA for the purpose of KYC.
In pursuance of the Original Circular, the Department of Revenue notified 155 (one hundred fifty-five) reporting entities as sub-KUA to use Aadhar authentication services of UIDAI under Section 11 of the Prevention of Money Laundering Act, 2002 (“PMLA”).
In exercise of its powers under Section 11(1) of the PMLA, on July 20, 2022, SEBI issued a circular (“Circular”) allowing these entities to provide e-KYC Aadhar authentication services of UIDAI in the securities market as a sub-KUA. The Circular provides that these entities shall enter into an agreement, as prescribed by UIDAI, with a KUA and get themselves registered with UIDAI as sub-KUAs. Such sub-KUAs shall follow the process described in a circular issued by SEBI on November 5, 2019. Further, KUAs shall facilitate the onboarding of these entities as sub-KUAs.
Please find a copy of the Circular, here.
This update has been contributed by Aastha, Partner & Tweesha Gosar, Associate.
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