SEBI Proposes Digital KYC For NRIs, OCIs To Invest In Indian Markets From Abroad
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SEBI has proposed digital KYC for eligible NRIs, OCIs, and foreign nationals residing in FATF-compliant countries who do not have a physical presence in India. It also wants KYC records to be portable across intermediaries.
The Securities and Exchange Board of India (SEBI) has proposed changes that could allow eligible NRIs, Overseas Citizens of India (OCIs) and foreign nationals to complete KYC for investing in India's securities market without travelling to India.
What Has SEBI Proposed For NRIs And OCIs?
The proposal covers individual Persons Resident Outside India (PROIs) based in FATF-compliant countries. At present, physical presence in India is required for digital onboarding in such cases. The proposed changes would allow the process to be completed from overseas.
The proposal does not apply to individuals seeking registration as foreign portfolio investors, who will continue to follow the separate FPI framework.
How Will Digital KYC Work For Investors Abroad?
SEBI has proposed additional checks even if the onboarding is completed remotely. These include a liveness check, KYC verification in the presence of an authorised representative and live capture of the investor's latitude and longitude.
The location captured during the process would need to match the country stated in the investor's proof of address. Intermediaries would also have to block connections coming through spoofed IP addresses.
This means the proposal is not about removing KYC requirements. The main change is that eligible investors could complete them while staying abroad.
Will NRIs Be Able To Use Their KYC Across Different Intermediaries?
SEBI has also proposed making KYC records of individual PROIs portable between intermediaries.
Under the proposal, KYC Registration Agencies could treat verified records as portable, with individual details marked as validated after being checked against official or source databases.
This could mean an overseas investor would not have to go through the same KYC exercise each time they approach another SEBI-registered intermediary. An intermediary could also use KYC information already verified with another SEBI-registered intermediary or another regulated financial-sector entity through the KYC system.
The changes are still at the proposal stage and will have to be finalised by SEBI before they become effective. If approved, the framework could make it easier for the Indian diaspora and other eligible overseas investors to access India's securities market without travelling to India just for KYC.
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