In addition, market regulator SEBI is working on further tightening of its surveillance mechanism The issue of making the know your customer (KYC) norms more strict was taken up at the last meeting of a sub-committee of the Financial Stability Development Council (FSDC), headed by Reserve Bank Governor.
Know your customer (KYC) norms for all SEBI regulated entities have been different but with new norm an investor has to satisfy the KYC requirement only once for all capital market transactions.
SEBI has also eliminated the threshold levels or category (class) of investors will exist for implementing know-your-customer (KYC) norms which means permanent account number (PAN) requirements for MF investors having microsip (small ticket SIPs) investments of up to Rs 50,000 per financial year, which was not required earlier.
The government has announced in February that Unique Identification Authority of India (UIDAI) has suggested formation of a working group with participation of market regulator SEBI to work out modalities for recognising 'Aadhaar' for Know Your Client purposes in securities market.
UIDAI has suggested constituting a joint working group of SEBI and UIDAI to work out the modalities for recognising Aadhaar as a proof of address and proof of identity from Know Your Client (KYC) purposes in securities market.
View: This should be brought in at the earliest. As it will reduce the paper work, and be more encouraging for new participants. With a nation where majority of the population in the of investment will put their savings in fixed deposit and post office savings scheme, a small move like simplifying the process will go a long way.