Key Takeaways
- • The Securities and Exchange Board of India (SEBI) relaxed know-your-client (KYC) requirements for overseas individual investors, effective December 3.
- • Eligible investors from Financial Action Task Force (FATF)-compliant jurisdictions can complete digital onboarding without being physically present in India.
- • The framework covers non-resident Indians (NRIs) and foreign nationals, and extends to re-KYC of eligible overseas individual clients.
- • Custodian banks and brokers may accept digital KYC submissions and video-based verification where in-person verification is not feasible.
- • Foreign nationals seeking investment access under the foreign portfolio investor (FPI) route remain governed by SEBI's existing FPI framework.
Summary
India's markets regulator, the Securities and Exchange Board of India (SEBI), has relaxed know-your-client (KYC) requirements for overseas individual investors, according to Reuters. SEBI announced the revised rules on Wednesday, and they take effect from December 3. The changes allow individuals from jurisdictions that are compliant with the Financial Action Task Force (FATF) standards to complete digital onboarding without being physically present in India.
The revised framework applies to non-resident Indians (NRIs) and foreign nationals. Custodian banks and brokers may accept digital submission of KYC information and supporting documents from eligible overseas clients. Where physical in-person verification is not feasible, intermediaries may conduct video-based verification. The rules also allow banks and brokers to rely on KYC undertaken by another SEBI-registered intermediary, or by an entity regulated by other financial-sector regulators, based on records held in the central registry.
The framework will also apply to re-KYC of eligible overseas individual clients, extending the streamlined process to periodic document refreshes. The relaxation does not extend to foreign nationals seeking to invest under the foreign portfolio investor (FPI) route, who will continue to be governed by SEBI's FPI framework.
The revised framework applies to non-resident Indians (NRIs) and foreign nationals. Custodian banks and brokers may accept digital submission of KYC information and supporting documents from eligible overseas clients. Where physical in-person verification is not feasible, intermediaries may conduct video-based verification. The rules also allow banks and brokers to rely on KYC undertaken by another SEBI-registered intermediary, or by an entity regulated by other financial-sector regulators, based on records held in the central registry.
The framework will also apply to re-KYC of eligible overseas individual clients, extending the streamlined process to periodic document refreshes. The relaxation does not extend to foreign nationals seeking to invest under the foreign portfolio investor (FPI) route, who will continue to be governed by SEBI's FPI framework.
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