This article delves into the significance of KRA (KYC Registration Agency) validation and its impact on investors. Let’s understand the impact first.
What is the impact if KRA validation is not done?
- Trading restrictions: Clients may be prohibited from trading on any exchange or manage their open positions (if any) until they comply with the KYC requirements
- Account deactivation: Clients trading and demat account will remain deactivated until their KRA details are updated and validated.
What is KRA validation?
KRA validation refers to the process of verifying and validating the Know Your Customer (KYC) details stored in the records of a KYC Registration Agency (KRA). The primary purpose of KRA validation is to ensure the accuracy, authenticity, and compliance of the KYC information maintained by the agency.
Click here to know the procedure to validate your KRA details.
Want to understand what is KRA?
KRA stands for “KYC Registration Agency.” KRA is an entity authorized by the Securities and Exchange Board of India (SEBI) to maintain KYC records of investors in the capital market.
The primary responsibilities of a KRA include:
- KYC Registration: Collect and maintain KYC details of investors in electronic format.
- Data Verification: Verify the authenticity of the KYC documents submitted by investors.
- Centralized Database: Maintain a centralized database of KYC records, making it accessible to registered intermediaries such as mutual funds, stockbrokers, and depository participants.
- Information Sharing: Facilitate the sharing of KYC information among financial institutions and intermediaries to avoid redundancy in the KYC process.
- Updates and Changes: Handle updates and changes to investor information, including modifications in the case of changes in address, contact details, etc.
- Compliance: Ensure compliance with regulatory guidelines and data protection standards.