2 weeks ago
SEBI Proposes Easier KYC Norms for NRIs, OCIs, Foreign Investors
SEBI is the agency in India that looks after the country's stock markets.
It has proposed a new plan to make it easier for people living outside India to start investing in Indian markets.
These people include NRIs, who are Indians living abroad, and OCIs, who are people of Indian origin living overseas.
Right now, such investors may be required to travel to India to prove who they are.
The new plan would let them complete this identity check online from their home country.
This would only apply to investors living in countries that follow international financial safety rules.
To keep things safe, the plan includes checks like a live photo of the person and their location.
It also blocks people from using fake internet addresses.
The goal is to make investing in India simpler while still stopping fraud.
The Securities and Exchange Board of India (SEBI) has proposed relaxing Know Your Client (KYC) norms for individual Persons Resident Outside India (PROI), including NRIs, OCIs and foreign nationals.
Under the proposal, individual PROI clients from FATF-compliant countries would no longer need to be physically present in India and could complete KYC through digital modes.
Intermediaries would apply safeguards including a liveness check, KYC verification before authorised representatives, live capture of latitude and longitude, and prevention of spoofed IP addresses.
SEBI proposed making individual PROI KYC records portable, with KYC Registration Agencies marking attributes as 'validated' when verified against official or source databases.
The proposal follows stakeholder representations and the Finance Ministry's June amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and is aimed at channelling overseas savings into Indian capital markets.
- Who
- The Securities and Exchange Board of India (SEBI), which proposed the changes; affected groups include individual Persons Resident Outside India (PROI) — NRIs, OCIs and foreign nationals — along with intermediaries and KYC Registration Agencies.
- What
- Relaxed KYC norms allowing eligible overseas individual investors to complete KYC digitally without being physically present in India, with KYC portability and the ability to rely on KYC done by other regulators' entities.
- Where
- India's securities market; the relaxation applies to PROI clients located in FATF-compliant jurisdictions abroad.
- When
- SEBI announced the proposals on Friday; the articles do not give an exact date.
- Why
- To simplify investor onboarding, enhance market participation, channel overseas savings into Indian capital markets, and respond to stakeholder representations and the Finance Ministry's June amendment to FEMA rules.
Key facts
- Regulator
- Securities and Exchange Board of India (SEBI)
- Affected investors
- Individual Persons Resident Outside India (PROI) — NRIs, OCIs and foreign nationals
- Key proposal
- Digital KYC from abroad without physical presence in India for clients in FATF-compliant jurisdictions
- Safeguards
- Liveness check, authorised representative verification, live latitude/longitude capture, blocking spoofed IP addresses
- KYC portability
- KYC Registration Agencies (KRAs) would treat individual PROI KYC records as portable
- Related rule change
- Finance Ministry's June amendment to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019
- Status
- Consultation paper / proposal, not yet final
Quotes
Securities and Exchange Board of India
Regulatory body overseeing India’s securities market
“"Enabling smooth onboarding would enhance market participation, make investing back home easier for the Indian diaspora (NRIs and OCIs), which would lead to channelisation of overseas savings into Indian capital markets."”
businesstoday.in
Sources
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