Relevance of KYC Validation

KYC validation and its relevance

Learn about KYC Status being Validated and its relevance

As per the KYC master circular by SEBI, there are a couple of changes in interpreting investors' KYC statuses and their applicability while making investments. These changes went live on April 1st, 2024.

All the investors whose KYC status is KYC Validated at the KRA are allowed to place all types of transactions and have no restrictions whatsoever
All the investors whose KYC status is KYC Registered or KYC Verified at the KRA are allowed to transact only on existing folios
- However, if they want to place a fresh purchase request, they have to first modify their KYC to include their Aadhaar details
- Once Aadhaar details are tagged to the KYC records and KRAs validate the same, the status at the KRA would change to KYC Validated and now the investor can place a fresh purchase request.

With the above background, FP made some minimal changes to KYC Check APIs to accommodate the same -

For all the KYC Validated cases, the KYC Check API response would return the status as true with reason and action as null
For all the KYC Registered or KYC Verified cases, the KYC Check API response would return the status as false with reason as incomplete and action as modify. A sample response would like below -
```
{
// Displaying only a part of the object for brevity
...

"status": false,

"reason": "incomplete",
"action": "modify"

...
}
```

References

Master KYC Circular by SEBI can be found here
Joint press release by KRAs can be found here
FAQs on revised KYC Process prepared by BSE can be found here