Sebi Proposes Expanded Role for KYC Agencies as Accreditation Agencies

Sebi suggests allowing all KYC registration agencies to serve as accreditation agencies, currently limited to subsidiaries of stock exchanges and depositories. This expansion aims to boost competition and efficiency. Public comments are invited until July 8. Sebi also proposes streamlined onboarding of accredited investors by AIFs.

Securities and Exchange Board of India (Sebi) has proposed that all KYC registration agencies should be allowed to operate as accreditation agencies. This suggestion aims to expand the current scope, which confines this role to subsidiaries of stock exchanges and depositories.

Furthermore, Sebi's proposal includes facilitating the onboarding process for accredited investors with the intervention of an AIF manager. This streamlining process, however, mandates receiving an accreditation certificate before any financial transactions occur.

Sebi's move is expected to introduce more competition among agencies, effectively lowering service costs. The window for public commentary on these proposals remains open until July 8. The regulatory body hopes this change will stabilize the accreditation environment without causing disruptions.

(With inputs from agencies.)