The Securities and Exchange Board of India released new guidelines for KYC Registration Agencies (KRA) on Wednesday.
After the new rules come into effect, such agencies will have to independently validate KYC records of all clients.
"The validation of all KYC records (new and existing) shall commence from July 1, 2022,” the Securities and Exchange Board of India (SEBI) said.
The regulator announced if client's KYC records are not found to be valid by KRA after the validation process, they will not be allowed to transact in the securities market.
On successful completion of KYC validation, Sebi said that a unique client identifier called KRA identifier will be assigned by KRA to the client.
The KYC records of new clients, who have used Aadhaar as an officially valid document, will be validated within two days of receipt of KYC records by KRAs.