The Securities and Exchange Board of India has extended to June 30, 2022 the deadline for making demat and trading accounts KYC-compliant. The deadline was previously set for March 31, 2022, but according to a notification from NSDL, the date has been changed. On 31st March 2022, the National Securities Depository Limited (NSDL) has said in a circular that “NSDL vide its Circular No. NSDL/POLICY/2022/041 dated March 25, 2022 informed about the procedure for suspension of demat accounts in case of non-compliance with 6 KYC attributes. Based on the discussion held with other MIIs and SEBI, it is decided to give a one-time extension for existing demat accounts till June 30, 2022.”
Account holders who have not updated their KYC credentials yet have three months to do so to prevent their demat and trading accounts being terminated. Non-compliant demat accounts would be made inactive, which means no transactions will be permitted. Stockholders with a deactivated demat account will not be able to sell or buy new stocks, nor will they be able to transfer their stock. Account transfers and inter-depository transfers will also be forbidden.
According to a circular of NSDL “Participants are requested to note that in case where client fails to update the 6 KYC attributes viz Name, Address, PAN, valid Mobile No., valid Email ID and Income range in their demat accounts by March 31, 2022, such demat accounts need to be suspended (suspended for Debit) by Participants until deficient KYC attributes are updated by Participants in NSDL system based on the client request. Out of the mandatory 6 KYC attributes, name and address are already mandatory field in NSDL system and PAN non-compliant demat accounts are already in suspended status.”
The circular also clarified that “For demat accounts wherein any one or more of KYC attributes is not updated i.e. Mobile No., Email ID and Income Range (Out of these 3 attributes, either any one OR any two OR all three attributes are not updated), NSDL will suspend such demat accounts in eDPM system of Participants and no action w.r.t. suspension of demat account is required to be taken by the Participants for such KYC non-compliant demat accounts.”
A holder of a demat or trading account must update six KYC attributes: name, address, PAN, valid mobile number, valid email ID, and income range to keep his or her account active. As per NSDL circular “Participants are informed that a considerable time has elapsed during which Participants have been advised to proactively collect the 6 KYC attributes.
However, all demat accounts are still not updated with 6 KYC attributes. Participants are advised to take all possible measures so that the demat accounts are compliant before the extended timeline of June 30, 2022 and no disruption is caused in the market due to non updation of 6 KYC attributes.
